Salary criteria for EPs and S Passes in Singapore raised to S$4,500 and S$2,500 respectively

Given the weakness in the job market and uncertain growth outlook, the Ministry of Manpower (MOM) has updated the Employment Pass (EP) and S Pass criteria. 

According to a media release, the qualifying salary for Employment Passes (EP) will be raised to S$4,500 from 1 September 2020, while the salary for S Passes will be raised to S$2,500 from 1 October 2020. Additionally, the EP qualifying salary for the financial services sector will be further raised to S$5,000, effective 1 December 2020.

Further, two additional steps will be taken under the Fair Consideration Framework (FCF) to prevent discrimination against local job applications in favour of foreign applicants. These include extending the FCF job advertising requirement to S Pass applications and doubling the minimum FCF job advertising duration for EP and S Pass applications.

MOM noted that these changes will complement the extension of the Jobs Support Scheme and the introduction of the Jobs Growth Incentive which were announced earlier. Taken together, the Government is providing a strong package of support to businesses that are in a position to retain or expand local employment, as well as comprehensive measures to help local jobseekers secure meaningful work.

In a Facebook post, NTUC Assistant Secretary-General Patrick Tay said: "Glad that the Government has sent a strong signal for employers to ensure fair consideration and treatment of Singaporeans, especially in the current climate. The upward revision of the salary thresholds for both EP holders and S Pass holders, including the higher salary threshold for the finance sector, will give an added boost to our ongoing efforts to ensure that Singaporeans have access to a level playing field and hopefully tip employers to hire and invest in more Singaporeans. At the same time, with higher wage floors for foreign workers, we will need to pay attention to ensuring wage parity, in particular for Singaporeans who are performing similar jobs."

Here's what HR and employers need to know about the changes: 

Minimum qualifying salary for EP raised from S$3,900 to S$4,500

From 1 September 2020, the salary requirement for EPs will be raised to $4,500 for all new applicants.

The qualifying salaries for older and more experienced EP candidates in their 40s will be raised correspondingly and will remain around double the minimum qualifying salary for the youngest applicants.

For the first time, MOM will be setting higher qualifying salaries for a specific sector. 

The new salary criteria for EPs that take effect from 1 September 2020 will equally apply to the financial services sector. On top of that, from 1 December 2020, the minimum qualifying salary for EPs in the financial services sector will be further raised to $5,000 for new applicants. 

Similarly, the qualifying salaries for older and more experienced EP candidates in the financial services sector will be raised, with those in their 40s needing to meet around double the minimum qualifying salary for the youngest applicants.

MOM explained: "Salaries in the Financial Services sector have been consistently higher than in other sectors. The sector also continues to hire and has been attracting strong interest from local jobseekers with good qualifications."

The ministry added that these changes will complement MAS’ efforts to encourage and support financial institutions in developing a strong local pipeline of talent.

For renewal applicants, the above salary criteria will come into effect from 1 May 2021.

MOM noted that regular revisions to the salary criteria in recent years have slowed the growth of EP holders - from 13,000 annually in the first half of the last decade to less than 3,000 annually in the second half. 

S Pass salary requirements raised to S$2,500, no changes to levies and quota

From 1 October 2020, the S Pass minimum qualifying salary will be raised from $2,400 to $2,500, with qualifying salaries for older and more experienced S Pass candidates revised accordingly.

Similarly, for renewal applicants, the salary requirement will come into effect from 1 May 2021. 

On the bright side, there will be no further changes to levies and quotas in this round of adjustments. The previously announced reductions in the S Pass sub-Dependency Ratio Ceiling (sub-DRC) for the services, construction, marine shipyard and process sectors will proceed as planned.

MOM noted that through regular updates to the S Pass framework in recent years, the growth of S Pass holders has slowed, from an average of 17,500 annually in the first half of the last decade to less than 6,000 annually in the second half.

3 key considerations when evaluating EP and S Pass applications 

MOM emphasised that employers that need to augment their local PMET workforce with additional EP or S Pass applicants should strive continuously to build up and retain a strong Singaporean core.

Hence, in evaluating EP and S Pass applications, MOM takes into account whether the employer has:

• Kept up their support of local PMETs in their employment.
• Been responsive to government efforts to help them recruit and train more Singaporean PMETs.
• Discriminated against qualified Singaporeans.

While the above has always been government policy, additional emphasis will be given to them now, given the uncertain economic times. This is to remind all employers to play their part in building up their Singaporean workforce, and help sustain public support for a business-friendly work pass policy.

Two further steps taken under the FCF 

To ensure employers have fairly considered all candidates before submitting work pass applications, the FCF requires employers to first advertise jobs on MyCareersFuture.sg (MCF) to make these positions known to local jobseekers. Employers should also be fair in their selection process and properly document the reasons for choosing a candidate over others.

From 1 October 2020, two further steps will be taken under the FCF.

• #1 The FCF job advertising requirement will be extended to S Pass applications from 1 October 2020
  The FCF job advertising requirement will be extended to S Pass applications submitted from 1 October 2020. This will promote greater awareness of vacancies in mid-skilled jobs among local jobseekers, and also require employers to make greater efforts to consider local candidates.
• #2 Minimum FCF job advertising duration for EP and S Pass applications will be doubled to 28 days, from 1 October 2020
  To give local jobseekers more time to respond to job openings and for employers to seriously evaluate their applications, the minimum FCF job advertising duration for EP and S Pass applications will be doubled from 14 days to 28 days. This change will be implemented for new EP and S Pass applications from 1 October 2020.

Employers are expected to take fair hiring seriously and give due consideration to local job applicants regardless of their age, gender and ethnicity, MOM noted. 

The ministry added that discrimination against local job applications in favour of foreign applicants is especially unacceptable and employers who practise discriminatory hiring in any form will have their work pass privileges cut back and may also face prosecution.

This year alone, 90 employers have had their work pass privileges suspended because of FCF infringements.

Tay added: "With S Pass numbers on the rise, I am heartened that MOM has also taken in my calls to broaden the scope of the Fair Consideration Framework to include S Pass applicants, and implemented even more stringent criteria in terms of the mandatory advertising requirements. I will continue to lobby for the publishing of the FCF watchlist, as a stronger deterrent especially for recalcitrant companies who continue to keep to unfair and biased hiring practices.

While these measures and adjustments aim to help nudge employers to give Singaporeans a fair chance, fair consideration is fundamentally about mindset."

Employers whose PMET workforce profiles suggest a bias against locals will be put on a watchlist

Besides meeting FCF requirements, employers whose PMET workforce profiles suggest a bias against locals will be put on a Watchlist. Their EP and S Pass applications will be subject to greater scrutiny.

Since 2016, more than 1,200 employers have been scrutinised under the FCF. In all, 3,200 EP applications have been rejected or withheld by MOM, or withdrawn by employers. Over the same time period, employers on the FCF Watchlist have hired more than 4,800 Singaporean PMETs.

Before placing employers on the watchlist, MOM will engage an expanded group of employers to review their hiring practices. This expanded group will include firms whose Singaporean core has been weakening or whose EP and S Pass workforce are overly concentrated from a single source.

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