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:
- A weak Singaporean core.
- A weak commitment to nurturing their Singaporean core in the future.
- 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.
Copyright © 2016 Berry Appleman & Leiden LLP. All rights reserved. Reprinting or digital redistribution to the public is permitted only with the express written permission of Berry Appleman & Leiden LLP. For inquiries please contact copyright@bal.com.
IMPACT – MEDIUM
What is the change? Work permit levies for foreign workers in the construction and services sectors will increase between 7 and 18 percent, depending on the category of permit. Levies for S Pass holders will increase between 5 and 18 percent.
What does the change mean? Affected employers should plan for the pending increases.
- Implementation time frame: July 1, 2016
- Visas/permits affected: Work permits in the construction and services sectors; S Passes.
- Who is affected: Employers, work permit holders in the construction and services sectors, S Pass holders.
- Next Steps: Affected companies must be sure they comply with the new levies once they take effect July 1.
Background: Heng Swee Keat, Singapore’s minister of finance, announced March 24 that Singapore would increase some foreign worker levies this year. The exact amounts became available last week.
| Type of Permit or Pass |
Current Levy |
July 1, 2016 |
Percentage
Increase |
| Construction Sector Work Permit (R2) |
SG$550 |
SG$650 |
18 % |
| Services Sector Work Permit (R2) – Basic Tier |
SG$420 |
SG$450 |
7 % |
| Services Sector Work Permit (R2) – Tier 2 |
SG$550 |
SG$600 |
9 % |
| Services Sector Work Permit (R2) – Tier 3 |
SG$700 |
SG$800 |
14 % |
| S Pass – Basic Tier |
SG$315 |
SG$330 |
5 % |
| S Pass – Tier 2 |
SG$550 |
SG$650 |
18 % |
The levy rates for basic tier R2 construction workers will be raised again on July 1, 2017 to SG$700.
As was previously announced, a one-year freeze will be placed on levy increases in the marine and process sectors because of a reduction of work permit holders in those sectors. There will also be no increase to work permit levies in the manufacturing sector, as was announced in 2015.
BAL Analysis: Singaporean officials are striving to boost revenue by raising S Pass levies and work permit levies in certain sectors. At the same time, they have moved to stop planned increases in sectors where the number of work permit holders has declined. Employers affected by the changes should plan for the increases, which take effect July 1.
This alert has been provided by the BAL Global Practice group in Singapore. For additional information, please contact singapore@bal.com.
Copyright © 2016 Berry Appleman & Leiden LLP. All rights reserved. Reprinting or digital redistribution to the public is permitted only with the express written permission of Berry Appleman & Leiden LLP. For inquiries please contact copyright@bal.com.
IMPACT – MEDIUM
What is the change? Singapore has released a report on labor market trends in 2015.
What does the change mean? The economy is softening and showing slower growth in local and foreign employment. Total employment grew by less than 1 percent, but unemployment remained low, averaging 1.9 percent.
Key statistics:
- Local employment was flat for all of 2015, following two previous years of high growth.
- Foreign employment grew by only 2.3 percent, continuing its steady decline over the past several years.
- By the end of 2015, locals made up two-thirds of the employed workforce and foreigners made up the remainder. The number of foreign workers (excluding foreign domestic workers) totaled 1.16 million.
- Unemployment remained largely unchanged since 2011, even though layoffs increased across all sectors. The majority of layoffs occurred in the services sector, followed by manufacturing and construction.
BAL Analysis: The report is consistent with government policies that have encouraged employers to localize their workforces and restructure toward a manpower-lean economy.
This alert has been provided by the BAL Global Practice group in Singapore. For additional information, please contact singapore@bal.com.
Copyright © 2016 Berry Appleman & Leiden LLP. All rights reserved. Reprinting or digital redistribution to the public is permitted only with the express written permission of Berry Appleman & Leiden LLP. For inquiries please contact copyright@bal.com.
IMPACT – HIGH
What is the change? Heng Swee Keat, Singapore’s minister of finance, announced today that Singapore would increase foreign worker levies this year.
What does the change mean? The increases will affect S Pass holders in all sectors and work permit holders in the services and construction sectors.
- Implementation time frame: July 1, 2016
- Visas/permits affected: S Passes and work permits.
- Who is affected: Employers, S Pass holders, work permit holders in the services and construction sectors.
- Next Steps: Affected companies must be sure they comply with the new levies once they take effect in July.
Background: In 2015, authorities announced that scheduled levy changes would be deferred until 2016. The finance minister announced today that increases for S Pass holders and work permit holders in the services and construction sectors would take effect this year. Details on the exact amount of the increases will be provided once authorities release Annex A-3 of the 2016 budget statement.
BAL Analysis: A significant number of employers will be affected by the levy changes, but authorities did place a one-year freeze on levy increases in the marine and process sectors, citing a reduction of work permit holders in them. Those employers who are affected should plan for the pending increases.
This alert has been provided by the BAL Global Practice group in Singapore. For additional information, please contact singapore@bal.com.
Copyright © 2016 Berry Appleman & Leiden LLP. All rights reserved. Reprinting or digital redistribution to the public is permitted only with the express written permission of Berry Appleman & Leiden LLP. For inquiries please contact copyright@bal.com.
IMPACT – MEDIUM
What is the change? Employment Pass renewals are undergoing increased scrutiny, but only certain applications are being flagged as suspicious. In particular, officials are watchful for applications from newer entities with a high ratio of foreign to Singaporean workers or instances where a foreign employee receives a sudden salary increase to meet Employment Pass criteria.
What does the change mean? In general, applications from established companies without any unusual changes are being renewed as usual. Renewal applications that raise the suspicion of immigration officers are not being renewed for a full two-year period, but instead are being approved for a shorter one-year period.
- Implementation time frame: Ongoing.
- Visas/permits affected: Employment Passes.
- Who is affected: Companies sponsoring foreign workers for Employment Passes.
- Business impact: Employers should review their policies and make sure they are in compliance with all regulations and be prepared for possible requests for additional documentation when renewing Employment Passes.
Background: The Ministry of Manpower appears to be reviewing renewal applications more closely. Officials may request additional supporting documentation or reverification of educational degrees, for example. Applications in which an employee’s salary is suspected of being boosted to qualify for an Employment Pass instead of an S Pass (or an S Pass instead of a Work Permit) may also raise red flags.
BAL Analysis: In general, larger established companies with appropriate ratios of foreign workers as determined by the ministry and without any unusual changes to foreign employees’ salaries have not been affected by the increased scrutiny and are not experiencing difficulty in renewing Employment Passes for the full two years. BAL is following trends in approvals and enforcement and will update clients on any significant developments.
This alert has been provided by the BAL Global Practice group in Singapore. For additional information, please contact singapore@bal.com.
Copyright © 2016 Berry Appleman & Leiden LLP. All rights reserved. Reprinting or digital redistribution to the public is permitted only with the express written permission of Berry Appleman & Leiden LLP. For inquiries please contact copyright@bal.com.
IMPACT – MEDIUM
What is the change? A court in Singapore has sentenced an individual acting as an employment agent to 16 months in prison for obtaining work passes by submitting false information on the applications. The workers who received the passes were deported and permanently barred from returning, and the employers who provided false information will be barred from hiring foreign workers.
What does the change mean? The case is a compliance reminder to employers that the Ministry of Manpower is aggressively investigating and prosecuting companies and individuals making false statements or committing other forms of fraud in the filing of work pass applications.
- Implementation time frame: Ongoing.
- Visas/permits affected: All work passes.
- Who is affected: All companies sponsoring foreign employees for work passes.
- Business impact: Violations of work pass regulations carry serious consequences and can include fines up to 20,000 Singapore dollars (about US$14,000) and up to two years’ imprisonment, as well as barring employees from the country and suspending a company’s work pass privileges.
- Next steps: Employers should do due diligence in working with employment agencies and should make sure all declarations on work pass applications are true and accurate.
Background: In this case, an individual acted as an employment agent and submitted work pass applications, purportedly for foreign domestic workers, using false information from employers. The employers did not intend to hire the workers and the workers did not intend to work as domestic workers. The unlicensed agent, who charged each foreign worker SGD3,500 to SGD4,000 and paid the employers for using their false information, was charged in court with 32 counts of making false statements on work pass applications and ultimately sentenced to 16 months’ imprisonment after pleading guilty to 16 counts.
In the past two years, 78 individuals have been convicted of giving false information to obtain work passes, according to the Ministry of Manpower.
BAL Analysis: The ministry continues to focus on work pass applications and flex its investigatory power under the Employment of Foreign Manpower Act. Employers should be aware of the heavy enforcement environment and make sure their policies and procedures are in compliance with the work pass regulations and framework.
This alert has been provided by the BAL Global Practice group in Singapore. For additional information, please contact singapore@bal.com.
Copyright © 2016 Berry Appleman & Leiden LLP. All rights reserved. Reprinting or digital redistribution to the public is permitted only with the express written permission of Berry Appleman & Leiden LLP. For inquiries please contact copyright@bal.com.
IMPACT – HIGH
What is the change? The Ministry of Manpower has charged another employer with making false salary declarations on work pass applications, and has announced that it is currently investigating more than 200 similar violations by 95 employers.
What does the change mean? The government continues to aggressively pursue investigations and prosecutions against employers who violate work pass salary minimums or make other false or misleading statements on their applications.
- Implementation time frame: Ongoing.
- Visas/permits affected: Employment Passes, S Passes.
- Who is affected: Employers in Singapore applying for work passes.
- Business impact: Violations of work pass regulations carry heavy penalties, including fines, imprisonment and loss of work pass privileges.
- Next steps: Employers should make sure they are in compliance with all declarations on work pass applications.
Background: Over the past two years, MOM has stepped up enforcement against fraud in work pass applications and has successfully exercised its prosecutorial powers under the Employment of Foreign Manpower Act.
In the latest case, a former human resources director of a restaurant chain was charged with declaring a false salary amount for 20 work pass applicants to meet the minimum monthly salary threshold of 3,100 Singapore dollars (about US$2,175), while knowing that the employees would be paid less. The alleged violations are punishable by fines up to SG$20,000 and/or two years of imprisonment.
MOM also announced that it is currently investigating similar cases involving 241 foreign employees hired by 95 employers.
BAL Analysis: The recent activity is a reminder to employers that the Ministry is taking false statements in work pass applications seriously. Employers are advised to conduct routine compliance checks of their human resource policies and labor practices in Singapore.
This alert has been provided by the BAL Global Practice group in Singapore. For additional information, please contact singapore@bal.com.
Copyright © 2016 Berry Appleman & Leiden LLP. All rights reserved. Reprinting or digital redistribution to the public is permitted only with the express written permission of Berry Appleman & Leiden LLP. For inquiries please contact copyright@bal.com.
IMPACT – MEDIUM
What is the change? Singapore will extend its automated border clearance service to nationals of the People’s Republic of China.
What does the change mean? Chinese nationals who have visited Singapore at least three times in the previous year may enroll in the enhanced Immigration Automated Clearance System (eIACS).
- Implementation time frame: Nov. 16.
- Visas/permits affected: Multiple-journey visas.
- Who is affected: Nationals of the People’s Republic of China ages six and older who hold a multiple-journey visa valid for five years or longer and who have visited Singapore at least three times in the last 12 months.
- Business impact: The service provides faster airport clearance for frequent Chinese business visitors and also speeds travel for all travelers by relieving queues.
- Next steps: Applicants may enroll at Changi Airport, Woodlands Checkpoint, Tuas Checkpoint and the Immigration and Checkpoints Authority building.
Background: The eIACS system uses digital facial and fingerprint recognition. The government of Singapore estimates that it takes only eight seconds for travelers to clear immigration using the eIACS. The service is voluntary and free of charge.
BAL Analysis: Automated clearance systems speed travel by reducing airport immigration queues and allowing immigration officers to focus on high-risk travelers.
This alert has been provided by the BAL Global Practice group in Singapore. For additional information, please contact singapore@bal.com.
Copyright © 2016 Berry Appleman & Leiden LLP. All rights reserved. Reprinting or digital redistribution to the public is permitted only with the express written permission of Berry Appleman & Leiden LLP. For inquiries please contact copyright@bal.com.
IMPACT – HIGH
What is the change? Foreign nationals may now only use a work pass exemption for 90 days per calendar year.
What does the change mean? Foreign nationals performing work pass exempt activities for more than a cumulative 90 days in a calendar year will instead need to obtain the appropriate work authorization. The Ministry of Manpower has also further limited the types of activities that can be performed under the “Specialised Services” category.
- Implementation time frame: Immediate.
- Visas/permits affected: Work pass exemption.
- Who is affected: Foreign nationals using the work pass exemption.
- Business impact: The 90-day limit per calendar year and the changes to the allowed activities mean that businesses will need to obtain work passes to allow their employees to perform activities previously permitted on the work pass exemption.
Background: Singapore allows foreign nationals to enter the country and obtain a short-term visit pass and conduct certain activities with a work pass exemption for up to 60 days per visit, depending on the duration of the short-term visit pass. Recent changes made by the Ministry of Manpower now limit the use of the work pass exemption to a cumulative 90 days in a calendar year. Therefore, a foreign national can use the work pass exemption for the maximum 60 days once and then return at another time for an additional 30 days. Previously, the policy was not clear and foreign nationals could use the exemption for the maximum stay several times during the course of the year before drawing scrutiny from immigration officers. Companies must now obtain an appropriate work pass for their employees who will be performing activities eligible for the work pass exemption for more than 90 days in a calendar year.
The Ministry of Manpower has also changed the activities allowed under the “Specialised Services related to a New Plant / Operation / Equipment” category of work permit exempt activities to disallow software installation. The work pass exemption can still be used for the commissioning or auditing of any new plant and equipment and also for installing, dismantling, transferring, repairing or performing maintenance of any machine or equipment.
BAL Analysis: The new limitations may cause difficulties for companies that do not have a branch office in Singapore able to sponsor the work passes and may increase the burdens associated with doing business in Singapore for many companies. These changes are in line with the steady tightening of the foreign labor market in Singapore over the past several years.
This alert had been provided by the BAL Global Practice group in Singapore. For additional information, please contact singapore@bal.com.
Copyright © 2016 Berry Appleman & Leiden LLP. All rights reserved. Reprinting or digital redistribution to the public is permitted only with the express written permission of Berry Appleman & Leiden LLP. For inquiries please contact copyright@bal.com.
IMPACT – MEDIUM
What is the change? Singapore’s foreign employment growth rate has continued to slow in 2015 and is the lowest since 2009, according to a review of the first half of 2015 by the Ministry of Manpower released this week.
What does the change mean? Employers will continue to see a tighter labor environment as a result of the government’s measures to limit the foreign workforce.
- Implementation time frame: Ongoing.
- Visas/permits affected: Employment passes, S passes and work permits.
- Who is affected: All Singaporean companies that employ foreign workers.
- Business impact: The ministry said it intends to follow through on its current policies of tightened immigration standards that have limited the ability of employers to hire foreign workers.
Background: The ministry revealed in its recent Statement on Labour Market Developments that foreign employment grew by only 8,000 in the first half of 2015 – the smallest growth in a half-year period since 2009. The majority of this growth was found in the services sector; however, the greater percentage of new workers are work permit holders instead of more highly skilled work pass holders.
BAL Analysis: The latest drop in foreign employment rates reflects Singapore’s continued emphasis on localization of its workforce and overall tightening of standards for work pass applications. This means that talent shortages will likely continue as authorities have stated that previously announced tightening measures, such as levy increases for S passes and work permits scheduled for 2016, will be implemented as planned.
This alert has been provided by the BAL Global Practice group in Singapore. For additional information, please contact singapore@bal.com.
Copyright © 2016 Berry Appleman & Leiden LLP. All rights reserved. Reprinting or digital redistribution to the public is permitted only with the express written permission of Berry Appleman & Leiden LLP. For inquiries please contact copyright@bal.com.
