How MOM Changes Have Impacted Work Pass Applications In 2021
It hasn’t happened overnight, but the gradual changes to work pass quotas and requirements mean it is more difficult for a foreigner to secure a Singapore work pass in 2021 than it was five years ago.
Restrictions are only going to continue tightening, with the Ministry of Manpower (MOM)’s new reduced quota for S passes and changes to the Letter of Consent (LOC) coming into effect in May. Read on for more insights from our work pass processing team on the latest announcements and what’s to come.
Changes To S Passes
An S Pass is intended for staff of mid-level skill sets to work in Singapore. The employee needs to earn at least $2,500 per month and have relevant qualifications and experience.
From January 2021, the quota of S Passes a company could hold was reduced from one S Pass to every seven Singaporeans, to one S Pass to every nine Singaporeans. Two years previously, the quota was one S Pass to five Singaporeans.
Changes To LOCs
Last month (March 2021), MOM announced it would stop issuing Letters of Consent (LOCs) to Dependant’s Pass (DP) holders from May 2021. Until now, foreigners holding Dependant Passes have been able to secure work without having to meet the salary criteria of an Employment’s Pass (EP), via an LOC.
Our work pass experts weighed in on what these changes mean here.
Changes to EPs
There is no published quota for EP holders, but now more than ever, the MOM requires employers to make a stronger case for each candidate they wish to employ on an EP.
An EP applies to people in managerial, executive or specialist roles, so the employer needs to explain why they require the expertise of a foreigner when they apply for the pass. The employee must earn a fixed monthly salary of at least $4,500 per month, or $5,000 per month if they’re in the finance sector. The older and more senior the candidate, the higher their salary needs to be.
In May 2020, the MOM raised the minimum salary requirement (it was previously $3,900) in response to a softening economy due to COVID-19, and the need to protect a strong Singaporean work core.
If a company already has several EP holders on staff, it might find subsequent applications are more heavily scrutinised by the MOM, and that they need to provide more justification for the candidate’s profile.
Jobs Growth Incentive
The Singapore Government’s Jobs Growth Incentive encourages employers to create good, long-term jobs for Singaporeans, by offering 12-months of salary support until September 2022.
Companies need to meet certain criteria to qualify. They need to demonstrate each new hire is required to help grow the business, rather than replace an employee who has left the company.
When they do qualify, companies receive a 25% reimbursement of the employee’s monthly salary. Hiring a local mature employee, someone with a disability or an ex-offender will see the company reimbursed 50% of that employee’s wage each month.
Here at Accela, we have seen the JGI continuing to incentivise employers to create new roles for Singaporeans, especially among high-growth tech companies.
Considering Alternatives
Because it’s getting more difficult to obtain work passes, and also to bring an off-shore candidate into Singapore due to COVID-19 restrictions, the Accela Talent team is getting more queries from Singapore-based companies looking to hire people on local contracts but letting them continue to work offshore. It is possible, and that person will just have to work with the Singapore-based HR team to ensure they comply with tax requirements in their country of residence. You can also look into setting up your own business and employing yourself on an EP, or until May, an LOC.
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Our team of experts can help you incorporate your company with this in mind, and help you file the work pass applications with the MOM. We’d be happy to walk you through the process – get in touch to find out more: [email protected].