Scrapping The Letter Of Consent: What It Means For Dependent Pass Holders
Photo by Olga Serjantu on Unsplash
This month, the Ministry of Manpower (MOM) announced that from 1 May 2021, Dependant’s Pass holders will have to apply for a regular work pass to work in Singapore, and will no longer be able to apply to work under a Letter of Consent (LOC).
This sudden news has swept through the expat and business community, where many Dependant’s Pass (DP) holders are able to work in Singapore in their current capacity on a Letter of Consent.
At Accela Talent, we have been working closely with our clients who hold an LOC to bring them up to date on the recent developments, and to provide advice on the next steps. We’ve also been contacted by clients asking if their friends and family should hurry to obtain an Employment Pass (EP) before May.
The short answer is that no, you don’t have to rush – unless the LOC is expiring soon. If your LOC is expiring soon, we recommend to start the renewal process as soon as possible because approval can take up to three weeks from the date of application.
After 1 May you will be unable to renew your LOC or apply for a new LOC, but you can continue to work on your current LOC until it expires.
Once your LOC expires, your employer will have to apply for an Employment Pass, S Pass or Work Permit if they want to keep you. Your position will have to meet the qualifying salary criteria and the company you work for will also have to meet the Government-mandated Foreigner to Singaporean ratio.
There is one exception to this, and that’s for business owners. DP holders can continue running their businesses under an LOC if they are creating local employment.
In order to do this, they must meet two requirements:
The DP holder must be a sole proprietor, partner, or company director, holding at least a 30% shareholding in the business.
The business must hire at least one local employee (Singaporean or Permanent Resident) who is earning at least the prevailing Local Qualifying Salary and has received CPF contributions for at least three months.
The current Local Qualifying Salary is S$1,400 per month. Local employees who earn less than this, or who have been employed with the company for less than three months, will not meet the criteria, and the business will not qualify to apply for an LOC for the DP business owner.
If you are a business owner, and are currently a DP holder on an LOC, your LOC will be valid until it expires. After that, your business will have to either apply for your work pass (EP, S Pass or Work Permit) or seek an LOC extension until April 2022.
The Ministry of Manpower will be releasing more information on 1 May, and the Accela team is keeping a keen eye on any updates – we’ll be sure to share any new insights as we receive them!
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If you would like to know more about the criteria you need to meet to apply for one of these passes, please reach out to our team at [email protected]. We’re always more than happy to help!