New Rules for Foreign Workers in Singapore: Points System Shakes Up Employment Pass

Singapore is implementing significant changes to its Employment Pass system starting this September. The new points-based framework aims to prioritize local talent while maintaining the nation's status as a global business hub.
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Singapore, a magnet for global talent, is making significant changes to its Employment Pass (EP) regulations, aiming to prioritize local talent while maintaining its status as an international business hub. These adjustments reflect the government’s efforts to balance economic needs with public sentiment regarding foreign workers.

The New Employment Pass Framework

Points-Based System

Starting September 2024, Singapore will implement a points-based system to evaluate EP applications. This system assigns points based on several criteria:

  • Salary: Applicants earn points if their salary exceeds that of local employees in similar roles.
  • Education and Skills: Points are awarded based on the candidate’s educational qualifications and professional skills.
  • Diversity Contribution: Points are given if the applicant’s nationality contributes to the firm’s diversity.

Minimum Salary Threshold

To qualify for an Employment Pass, applicants must meet a new minimum salary requirement. The minimum monthly salary for EP holders has increased from S$5,000 (US$3,700) to S$5,600 (US$4,140). In the financial sector, the bar is set even higher, with the minimum salary rising from S$5,500 (US$4,100) to S$6,200 (US$4,600).

Existing Rules for Employment Pass

Qualification Criteria

Under the old system, the primary criteria for Employment Pass approval were the applicant’s educational background, professional qualifications, and a minimum salary threshold. While the minimum salary varied by age and industry, the evaluation process was less structured and transparent than the new points-based system.

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Application Process

Employers previously had more flexibility in hiring foreign workers, with fewer stringent requirements to justify the need for foreign talent over local hires. This led to a relatively straightforward application process, provided the candidate met the basic qualifications and salary benchmarks.

Impact on Global Talent

1. Increased Difficulty: Companies might struggle to find foreign workers for specialized senior positions, especially for those requiring specific experience not readily available in Singapore’s talent pool.

2. Limited Entry-Level Opportunities: Focus on hiring Singaporeans for entry and mid-level positions might limit opportunities for foreign talent to launch their careers in Singapore.

3. Transparency is a Plus: The new system offers clearer criteria for obtaining an EP, making the process more predictable for applicants.

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Local Sentiment: A Long-Awaited Shift

Many Singaporeans welcome the changes. They’ve felt overlooked for jobs they’re qualified for, leading to frustration with a perceived preference for foreign talent. The new system addresses this discontent and aims to reduce income inequality.

Early Signs of Success

The first quarter of 2024 shows promising results. The resident employment rate has risen, while non-resident employment, particularly in construction and manufacturing, has dipped.

Conclusion

Singapore’s overhaul of its Employment Pass system marks a significant shift in workforce management. The new points-based system and higher salary threshold aim to balance local and global workforce demands.

While prioritizing local talent, these changes pose challenges for international businesses and professionals. The success of these measures hinges on their effective implementation and the broader economic context.

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Manish Khandelwal
Manish Khandelwal

Manish Khandelwal, a travel-tech enthusiast with over a decade of experience in the travel industry. Founder and Editor-in-Chief of Travelobiz.com, he's passionate about writing.

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