Employers hiring foreign workers will soon have to pay them a higher minimum salary.
From September this year, the minimum qualifying salary for new Employment Pass (EP) applicants will be raised from the current $4,500 to $5,000. For the financial services sector, which has higher salary norms, the threshold will be increased from $5,000 to $5,500.
On Friday (Feb 18), Finance Minister Lawrence Wong stated that to ensure Employment Pass holders have the appropriate capabilities, the salary thresholds will be adjusted from time to time, as the salary level employers are willing to pay is a practical indicator of their quality.
“EP holders should be professionals and executives who can contribute to our economy, enhance the skills of their colleagues, and strengthen our workforce.”
This move ensures that incoming EP holders are comparable in quality to the top one-third of the local PMET (Professionals, Managers, Executives, and Technicians) workforce.
He added: “Beyond the salary thresholds, we will also refine how we assess EP applications to enhance the complementarity and diversity of our foreign workforce, and to increase certainty and transparency for businesses.”
However, Minister Wong stressed that even while investing in Singaporeans, Singapore must continue to stay open and bring in skills from around the world.
He added: “By combining local and foreign professionals, we form the best teams in Singapore to create value together.”
“This allows us to stand out in intense global competition and create more good jobs and career choices for Singaporeans.”
In addition to the salaries of EP holders, the salary threshold for S Pass holders will also be raised.
From September this year, the minimum qualifying salary for new applicants will be raised from the current $2,500 to $3,000. The salary threshold for the financial services sector will be increased to $3,500.
Lawrence Wong said the goal is for these mid-level skilled workers to be comparable in quality to the top one-third of local associate professionals and technicians.
The minimum qualifying salary for new S Pass applicants will be raised again in September next year and in September 2025. The specific salary values will be announced closer to implementation, based on prevailing wages.
For older EP and S Pass applicants, their higher salary thresholds will also be raised concurrently. For renewal applications, these changes will take effect one year later, from September 2023, to give businesses sufficient time to adjust.
To better manage the flow of S Pass holders, the Tier 1 foreign worker levy, for a quota of up to 10% of the total workforce, will also be progressively adjusted from the current $330 to $650 by 2025.
At the same time, there will be adjustments to the Work Permit policies for the construction and process sectors, which are heavily reliant on foreign labor.
For example, from January 2024, the Dependency Ratio Ceiling, or the proportion of foreign workers a company can hire, will be reduced from 87.5% to 83.3%.
The current Man-Year Entitlement framework—which refers to the total number of Work Permit holders allocated to a contractor for a specific project—will be replaced by a new foreign worker levy framework to encourage companies to support more off-site work and hire more highly-skilled Work Permit holders. This change will also take effect from January 2024.
More details on the changes to foreign worker policies will be announced during the Ministry of Manpower’s budget debate.
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