IMPACT – HIGH

What is the change? The minimum monthly salary for Employment Passes will increase from 3,300 Singapore dollars to SG$3,600 (about US$2,660).

What does the change mean? The higher salary requirement will take effect Jan. 1, 2017 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 must update their policies and budget for the higher salaries when hiring foreign workers and renewing Employment Passes of current foreign employees.

Background: The Ministry of Manpower announced the increase Tuesday 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, 2017 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:

Expiration Date of Existing EPs Salary Criteria
Before Jan. 1, 2017 May renew for up to three years at existing salary criteria.
Jan. 1, 2017 through June 30, 2017 May renew for one year at existing salary criteria.
July 1, 2017 and after May renew for up to three years and must meet new salary criteria.

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 should begin reviewing the current 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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