Introduction

For Singapore, 2019 was a good year with employment growth, low retrenchments and increasing income; however the outlook for 2020 has become uncertain not least due to the COVID-19 global pandemic. Ministry of Manpower’s (MOM) key challenges are to prevent large-scale job losses, prevent a scaling back or reversal of wage increases, and prepare Singapore businesses and workers for jobs of the future when the world reopens for business post-pandemic. This article summarises the key takeaways from measures announced in the speech by Minister for Manpower, Mrs Josephine Teo at MOM Committee of Supply 2020.

The 4 Pillars of Fairness and Key Takeaways

1. Fair Competition:

• From 1 May 2020, the Employment Pass (EP) minimum qualifying salary criteria will be raised from S$3,600 to S$3,900 per month for all new applications. The salary criteria for older, more experienced candidates will also be raised in tandem. For example, an EP applicant in his early 40s will need to earn around double the new minimum qualifying salary of S$3,900. For existing EPs, the new salary criteria will apply one year later, from 1 May 2021.
• S Pass quota cuts for the Construction, Marine Shipyard and Process sectors in 2021 and 2023, and increase in Local Qualifying Salary (LQS) from S$1,300 to S$1,400 with effect from 1 July 2020. LQS refers to the minimum monthly salary payable to local employees for them to be counted towards the employer’s S Pass and Work Permit DRCs.

2. Fair Hiring:

• From 1 May 2020, the advertising requirement will be expanded to include positions paying up to S$20,000 (up from S$15,000).
• Tightening enforcement of fair hiring practices through the use of data analytics to scrutinise EP applications and will also actively follow up on leads from whistle blowers. Where an employer is found to have pre-selected a foreign candidate and not given fair consideration to qualified local applicants, MOM will reject the EP application and ban the employer from hiring or renewing foreign workers.
• MOM proactively identifies employers suspected of nationality-bias in their hiring practices who exhibit an exceptionally high proportion of foreign PMETS compared to industry peers, and places them on a Fair Consideration Framework (FCF) Watchlist where all their EP applications will be scrutinised or withheld.
• Apart from nationality bias, MOM also takes action against all forms of discrimination including by age, gender, nationality or mental health condition. Employers are cautioned not to raise salaries of EP holders to comply with new minimum qualifying salary requirements while freezing salaries of the local workers, even if the local workers are better performers. Employers that violate the Tripartite Guidelines on Fair Employment Practices will be barred from hiring new foreign workers or renewing existing ones for a period of 12 to 24 months.
• MOM will prosecute employers and key personnel who make false declarations on fair consideration.

3. Fair Opportunities:

• S$500 SkillsFuture Credit Top-up for Singapore citizens and employers’ hiring incentive to employers to hire local mid-career workers in their 40s and 50s.

4. Fair Support:

• Retirement Age (RA) and Re-employment Age (REA) to be raised to 65 and 70 respectively by 2030, and employers’ hiring incentive for early adoption of raised RA and REA as well as grant to promote part time senior employment.
• CPF contribution rates for seniors to be raised gradually over the next decade with the first increase to take effect from 1 January 2021, with half the increase in employer contribution rates to be offset through the CPF Transition Offset Scheme.

Next steps

Given the increasing scrutiny and potential impact on business operations, employers are strongly encouraged to review their employment practices to weed out any discriminatory practices and be mindful to act in a manner that adheres to spirit (and not merely the letter) of these measures.

The information in this article is correct as of 17 Mar 2020.