IMPACT – HIGH

What is the change? The Ministry of Manpower has announced that companies applying for Employment Passes will be assessed for three additional criteria related to their Singaporean core. The assessment will be conducted by the Tripartite Alliance for Fair and Progressive Employment Practices.

What does the change mean? The additional assessments are intended to identify “triple weak” companies that have:

  1. A weak Singaporean core.
  2. A weak commitment to nurturing their Singaporean core in the future.
  3. A weak relevancy to the Singapore economy and society.

The ministry has already served notice on 100 companies identified as “triple weak.”

  • Implementation time frame: Immediate and ongoing.
  • Visas/permits affected: Employment Passes.
  • Who is affected: Companies sponsoring foreign workers for employment passes (EPs).
  • Business impact: The ministry has said that the vast majority of companies are not “triple weak” and will not be affected by the change.
  • Next steps: Employers should be aware of the additional criteria and increased scrutiny on those who do not have a strong local labor core.

Background: In a speech last week, Minister of Manpower Lim Swee Say announced the new measures amid comments that he was concerned about “pockets of EP concentration” in some companies and sectors, and that some companies may not be making reasonable efforts to provide fair employment opportunities to Singaporean citizens. There is no official guideline on the ratio of foreign to local employees, but the minister noted that all of the 100 companies that were served notice had workforces that employed EP holders as more than half of their total employees.

Going forward, as part of the EP application process, companies will be assessed for the three criteria in addition to the foreign employee having to meet individual criteria.

Companies found to be “triple weak” will be notified and contacted to improve their human resources practices. Those that do not make progress may have their work pass privileges suspended and applications for new EPs or renewals of existing EPs may be negatively affected.

BAL Analysis: Singapore continues to encourage localization of the labor force. This announcement confirms that the ministry has been monitoring companies and their hiring practices more stringently in relation to foreign workers.

This alert has been provided by the BAL Global Practice group in Singapore. For additional information, please contact singapore@bal.com.

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