On 18 February 2022, during the Annual Budget Statement, Minister for Finance, Mr Lawrence Wong, mentioned in Parliament that foreign employment in Singapore will be further regulated. The changes are as follows:
The aim of these changes is for the S Pass holders to be comparable in quality to the top one-third of local Associate Professionals and Technicians.
From 1 September 2022 | From 1 September 2023 | From 1 September 2025 |
---|---|---|
From $330.00 to $450.00 | From $450.00 to $550.00 | From $550.00 to $650.00 |
It is without doubt that the changes, especially in relation to EP applications and renewals, is to encourage MNCs to employ more Singaporeans, and to ensure that the foreign employees that are coming in on EPs are premium talent that they are unable to find in Singapore. Nevertheless, they have produced animated conversations among the Multi-National Companies (“MNC”) in Singapore regarding what this means regarding recruiting talent (in particular foreign talent) via future EP applications and renewals. Their concerns appear to be as follows:
There appears to be some anti-foreigner sentiment in Singapore due to a perception (rightly or wrongly) that the middle and senior management roles in MNCs tend to be disproportionately staffed by foreign nationals. The adjustment in minimum qualifying salaries and the DRC and levies, and the implementation of the COMPASS framework, could thus be seen as the Singapore government taking some steps towards addressing these concerns.
In our view, the new changes will have only limited success in weaning MNCs off foreign employees if there is a dearth of Singaporean talent in the relevant roles. The government therefore has to also upskill Singaporeans urgently for the relevant jobs that are in high demand and/or will be in high demand in the years and decades ahead. In that regard, a major revamp of the education curriculum may be in order.
The immediate aftermath of the changes as outlined above could be firms moving low-value work out of Singapore while keeping higher-value talent here.
Hopefully however, the medium and long-term changes would result in more Singaporeans being employed in the middle and upper tiers of management in the MNCs, while also ensuring that the foreign employees that are brought in are only the best and brightest talents not found in Singapore, working hand-in-hand with the local workforce to present Singapore as an unassailable investment destination for foreign investors, and allowing us to excel amid intense global competition in the years and decades ahead.
Vernon Voon
Partner
RHTLaw Asia
vernon.voon@rhtlawasia.com
+65 6381 6835
Vernon has extensive experience in assisting clients with their debt recovery litigation and management, having developed a strong focus in the area since 2004.
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