Minimum salary for employment passes to increase Jan. 1

IMPACT – MEDIUM

What is the change? Employers are reminded that the minimum salary for employment pass holders is set to increase Jan. 1 from 3,300 Singapore dollars to SG$3,600 (about US$2,592).

What does the change mean? Employers should begin preparing now for the new salary threshold. The salary requirement will take effect Jan. 1 for new employment pass applicants, and a transition schedule will be in place for applicants renewing existing passes.

• Implementation time frame: Jan. 1, 2017.
• Visas/permits affected: Employment passes.
• Who is affected: Companies sponsoring foreign workers on employment passes.
• Next steps: Employers should update their policies and budget for the higher salaries when hiring foreign workers or renewing employment passes of current foreign employees.

Background: The Ministry of Manpower announced the increase in July as part of its regular salary adjustments to keep pace with rising local wages, maintain the quality of the foreign workforce and enhance the competitiveness of local workers. The last salary adjustment for employment passes was in January 2014, when the minimum was raised from SG$3,000 to SG$3,300 per month.

New applicants filing after Jan. 1, must meet the new salary thresholds. For existing employment pass holders, the ministry will provide a period for businesses to adjust, using the following schedule:

The ministry also recommended that employers use the Self-Assessment Tool (SAT) on the agency’s website to assess whether candidates will meet the new salary criteria. The SAT will be updated in November.

BAL Analysis: Employers who have not already done so should begin reviewing the salaries of employees holding employment passes and plan ahead for the renewals if necessary. This increase to minimum salaries is one of many recent measures that tighten the employment pass eligibility of 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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