Singapore Archives

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.

IMPACT – LOW

What is the change? The Ministry of Manpower has announced a temporary program to give small- and medium-sized companies some flexibility in their foreign workforce if they restructure and strengthen their core of Singaporean workers.

What does the change mean? The government is continuing its efforts to encourage all employers to develop a strong core of Singaporean workers and is providing tools for small- and medium-sized enterprises (SMEs) to adjust to the tight labor market.

Implementation time frame: The two-year pilot program begins Oct. 1.
Visas/permits affected: Employment passes and S passes.
Who is affected: SMEs must apply to participate in the scheme.
Business impact: The scheme encourages firms to eventually reduce their numbers of foreign workers. The results of this pilot scheme may influence whether the ministry will continue its current policy of tightened immigration standards, which affects employers’ ability to hire foreign workers.

Background: The ministry announced the Lean Enterprise Development (LED) Scheme as a two-year initiative to help SMEs increase productivity and innovation, and use a leaner workforce in the face of local manpower and skills shortages. The scheme focuses on giving SMEs tools to achieve the necessary restructuring and skills training. The goal is to create business growth and better job opportunities and careers to Singaporeans.

The scheme’s temporary foreign manpower adjustments include the following:

Companies may reduce the number of work permit holders without reducing their existing quota for S Pass holders.
Companies may employ temporary foreign workers while recruiting and training locals to take on better jobs when the restructured business stabilizes.
Companies may pool foreign sources of expertise, such as master craftsmen, at the industry level in order to help transfer know-how to the local workforce.

Any transitional adjustments allowed will be reviewed on a yearly basis and will be renewable for a maximum of three years.

BAL Analysis: The scheme is a temporary measure and does not change the quotas or ratios required of companies employing foreign workers. Singapore continues to promote localization of its workforce, evidenced by recent data indicating a steep drop in the growth rate of employment of foreign workers. The LED Scheme is the latest in the government’s overall campaign to bolster training and skills acquisition by Singapore’s citizens in order to address current and future projections of manpower and skills shortages.

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? The Ministry of Manpower has confirmed that it has identified 38 firms whose employment pass applications will be closely watched.

What does the change mean? As an update to the ministry’s efforts to support local professionals, managers and executives (PMEs), the ministry has now identified 38 “double weak” firms from those they have engaged during the previous year. Double weak firms are companies that have a weak Singaporean core and weak commitment to the Fair Consideration Framework, the government’s effort to strengthen the core.

Implementation time frame: Ongoing.
Visas/permits affected: Employment passes.
Who is affected: Employers sponsoring foreign workers for employment passes.
Business impact: Longer processing times may result since more documentation and information will be required by the ministry from the firms on its watch list.
Next steps: Companies tagged as “double weak” by the agency will need to provide additional details, such as the number of Singaporeans who applied and interviewed for a certain role and information on whether the companies considered their current Singaporean employees for those positions.

Background: The Minister of Manpower, Lim Swee Say, wrote on his blog that the ministry is zealously scrutinizing the employment pass applications of the “double weak” firms to ensure that Singaporeans are considered fairly before a company decides to employ a foreign worker. Further, the ministry will ensure that these firms undertake efforts in training, developing and upgrading their local PMEs. In areas where Singaporeans are not qualified, companies are encouraged to transfer knowledge from foreign PMEs to Singaporean staff so that more Singaporeans will be able to fill certain gaps within the company.

The ministry also said that it will curtail employment pass privileges of “double weak” companies that are unresponsive or uncooperative.

BAL Analysis: The recent update is a sign that the ministry is continuing its support of local PMEs by further enhancing the Fair Consideration 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 released more details on new job advertising rules beginning Oct. 1 requiring employers to publish salary ranges for job vacancies.

What does the change mean? The published maximum salary must not be more than 1.5 to 2 times the minimum salary.

Implementation time frame: Oct. 1.
Visas/permits affected:Employment passes.
Who is affected:Employers sponsoring foreign workers for employment passes.
Business impact: If an employment pass application is rejected, the employer must re-advertise the job vacancy for another 14 days before they can resubmit the employment pass application.
Next steps:Companies must make sure they meet the salary range limitations in publishing job advertisements to avoid rejection of employment pass applications.

Background: The ministry has announced that the published salary must not have a wide range and that the maximum salary should not exceed 1.5 to 2 times the minimum salary. Employment pass applications will be rejected if the supporting job advertisements do not satisfy the requirements under the Fair Consideration Framework.

Companies with fewer than 25 employees continue to be exempt from the advertising requirements.

BAL Analysis: The ministry is further tightening the application process for foreign nationals. Companies may find these boundaries more challenging, as the ministry has now made clear that salary ranges that are too wide will lead to rejection of employment pass applications.

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 – LOW

What is the change? Singapore’s upcoming celebration marking 50 years of sovereignty will leave government offices closed from Aug. 7 through Aug. 10.

What does the change mean? Employers should factor the holidays into their timelines for employee start dates and when scheduling appointments for immigration services.

Implementation time frame: Aug. 7-10.
Visas/permits affected: All visas and permits.
Who is affected: Anyone needing immigration-related services.
Impact on processing times: All in-country immigration services, including issuance of employment passes and biometric appointments, will be suspended during the holiday period.
Business Impact: Holiday delays may have a minor impact on business schedules and assignments.
Next Steps: Those in need of appointments for immigration services should make them as soon as possible in order to avoid any delays associated with the holidays.

Background: Singapore’s National Day is celebrated Aug. 9 to mark the country’s 1965 independence from Malaysia. This year, Singapore will observe an extended Jubilee Weekend from Aug. 7 through Aug. 10 in celebration of its 50th anniversary of sovereignty. Government offices will be closed on these dates. Consulate posts abroad will also celebrate National Day, though dates of closures may vary.

BAL Analysis: Employers should take note of the holiday and plan accordingly. Those in need of consular services abroad should check holiday schedules before visiting an embassy or consulate.

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? Singapore has raised the fixed minimum salary required for work pass holders to be eligible to sponsor dependent relatives.

What does the change mean? Under the new criteria, work pass holders must meet a minimum fixed monthly salary of 5,000 Singaporean dollars (about US$3,650) to sponsor spouses and children on dependent passes and a monthly minimum of SG$10,000 to sponsor parents on long-term visit passes.

Implementation time frame: To take effect Sept. 1.
Visas/permits affected: Dependant’s Pass and Long Term Visit Pass.
Who is affected: Applicants submitting affected applications on or after Sept. 1.
Business Impact: Employers must factor in the revised minimum salary requirement when sponsoring work passes of foreign workers with family members accompanying them in Singapore.
Next Steps: Employers should update their policies for new Dependant’s Pass applications. Additionally, employees who transferred to a new employer and have an upcoming renewal applications for dependents on or after Sept. 1 should be aware of the increased salary requirement in determining if they are still eligible.

Background: Currently, work pass holders must earn a minimum monthly salary of SG$4,000 to sponsor family members and SG$8,000 to sponsor parents. The Ministry of Manpower regularly reviews and updates the qualifying salary criteria for work pass holders sponsoring Dependant’s and Long Term Visit Passes to ensure that foreign employees are able to support their dependents while in Singapore.

BAL Analysis: The increased salary requirement will make it more challenging for companies who plan to employ foreign workers with dependents.

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? The overall annual foreign workforce growth in Singapore has dropped from 144,500 in 2007 to 34,000 in 2014, a decline in the annual growth rate from 19 percent to 3 percent over the past eight years.

What does the change mean? Currently, foreign workers make up only about one-third of the workforce, a significant decrease from previous years and a level that the Ministry of Manpower intends to maintain.

Background: According to recent statements by the Minister of Manpower, all sectors experienced a “significant slowdown” in the growth rate of foreign workers over the past eight years. In the service sector, the increase in the number of foreign workers, expressed in raw numbers and year-to-year percentages, dropped from 54,500 (28 percent) to 21,500 (5 percent). The construction sector slowed from 36,000 (23 percent) to 9,700 (3 percent), and the manufacturing sector showed negative growth from 42,000 (18 percent) to 5,400 (-2 percent). The minister, Lim Swee Say, made the remarks July 14 in response to a question from the Singapore Parliament.

Singapore instituted a localization program in August 2014 aimed at giving Singaporean workers fair consideration for all jobs.

BAL Analysis: Government efforts to boost employment of Singaporean citizens have had a direct impact on employers who recruit foreign nationals. Companies must take additional steps when advertising job vacancies and consider Singaporeans before hiring foreign nationals, and authorities have increased enforcement of the Fair Consideration rules.

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? Companies will soon face tougher job ad rules when hiring foreign employees under the Fair Consideration Framework.

What does the change mean? Companies will be required to publish salary ranges for job vacancies in the Jobs Bank and may be required to submit additional information on whether local candidates were considered fairly.

Implementation time frame: The new rules will take effect Oct. 1.
Visas/permits affected: Employment passes.
Who is affected: Employers sponsoring foreign workers for employment passes.
Business impact: Increased scrutiny of employment pass applications may increase processing times, and employers will continue to face challenges in bringing in foreign workers to fill certain positions already impacted by skill shortages.
Next steps: Companies should prepare for the new rules and make sure they are in compliance or risk rejection of employment passes.

Background: The new measures are a continuation of the Ministry of Manpower’s (MOM) efforts to strengthen core employment of Singaporean Professionals, Managers and Executives (PMEs) and improve the quality assessment of foreign PME applicants.

Beginning Oct. 1, companies must state the salary ranges for PME vacancies in their job advertisements. Employers who eventually apply for employment passes where the job advertisement did not reflect the salary range will have their applications rejected. The rule is intended to make job terms clearer to Singaporean candidates and raise labor market transparency. The ministry will also increase scrutiny of job qualifications presented in support of employment pass applications to ensure that education certificates and other documentation supporting the application are valid and reflect the candidate’s actual skills.

Companies employing a weaker core of local PMEs compared to others within their industry will be required to submit more information to the MOM regarding their hiring practices, such as details on the number of applications submitted by Singaporeans, whether they were interviewed for the vacant post and the company’s current share of Singaporeans in PME positions at various levels.

BAL Analysis: The ministry is actively encouraging employers to transfer expertise from foreign workers to Singaporeans. While the new measures also offer financial help to companies who hire Singaporeans to offset wage costs, the stricter Fair Consideration Framework rules will make it more challenging for companies to hire 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? As the National Job Board completes its first year, the Singaporean government is reviewing the Fair Consideration Framework (FCF) rules and is considering collecting data from job advertisements placed on the job board.

What does the change mean? Companies should be aware that Singaporean authorities are continuing to push companies to consider local workers first and may add to existing job-ad requirements.

Implementation time frame: Ongoing.
Visas/permits affected: Employment Passes.
Who is affected: Employers posting job advertisements on the National Job Board and sponsoring foreign workers for Employment Passes.
Business impact: Business will be impacted if requirements are expanded beyond the current 14-day advertising period.
Next steps: The Ministry of Manpower (MOM) is reviewing the FCF program and plans to issue a report once the review is complete.

Background: When the FCF was implemented in August 2014, Singaporean authorities stated that labor market testing would be limited to the 14-day advertising requirement. Since then, government labor groups have called for data mining of the job posting records to identify skills and experience that may be lacking in the local labor pool. The groups have also suggested that employers be required to report placement figures of Singaporean residents so that the efficiency of the FCF program can be tracked.

BAL Analysis: The call by government labor groups to collect more data from the job advertisements and track placement rates of locals is a sign that further FCF requirements may be imminent. BAL will continue to monitor MOM and FCF regulations as we anticipate the results of MOM’s review of the program.

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 Singapore court has fined an individual 40,000 Singapore dollars (about US$30,000) after finding him guilty of conducting employment agency activities without a license in violation of the Employment Agencies Act.

What does the change mean? Employers who are recruiting employees should only work with employment agencies licensed by the Ministry of Manpower, as should foreign workers seeking employment in Singapore.

Implementation timeframe: Ongoing.
Visas/permits affected: All work passes.
Who is affected: Companies using employment agencies to recruit workers, and foreign workers using employment agencies to seek job opportunities.
Business impact: Businesses should be aware that MOM is continuing to crack down on unlicensed employment agencies.
Next steps: Companies and foreign workers should confirm that the employment agencies they work with are licensed with MOM.

Background: The case involved an individual who helped recruit a foreign worker for a construction firm and then charged the foreign worker an employment agency fee of SG$3,000. The individual forwarded copies of the foreign worker’s passport and other supporting documents to the company which secured a work permit for the foreign worker. After a court trial, a judge convicted the individual of conducting employment agency activities without a license, and fined him SG$40,000.

MOM also took separate action against the company for its role. The company pled guilty last year to one charge under the Employment Agencies Act for using the services of an unlicensed agency and was fined SG$4,000.

The Ministry states in its advisory that “Under the Employment Agency Act, any person who operates or abets an unlicensed employment agency is punishable with a fine of up to $80,000 or up to 24 months’ jail, or both. For subsequent convictions, a fine of up to $160,000 or up to 48 months’ jail, or both, will be imposed.” MOM also advised the public to use licensed employment agencies for employment needs. To ensure that employment agencies are legitimate, the public is encouraged to verify this information through the employment agency directory on the MOM website.

BAL Analysis: The case is a compliance reminder of MOM’s continued efforts to track down unlicensed employment agencies. Employers and foreign workers should be vigilant about working only with employment agencies registered in the employment agency directory on the MOM website.

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.