Employment Pass Renewals Drop in First Half of 2013

13 Nov 13

SINGAPORE

IMPACT – Medium

What is new? Approximately 2,600 foreign nationals had their Employment Pass renewal applications rejected in the first half of 2013.

What does it mean? The large drop in Employment Pass renewals is consistent with the Ministry of Manpower’s stated policy of encouraging businesses to reduce their reliance on foreign workers.

  • Implementation timeframe: Immediate.
  • Visas/permits affected: Employment Pass.
  • Who is affected: Employment Pass renewal applicants.
  • Business impact: Businesses that rely on foreign employees may face a negative impact.
  • Next steps: Businesses should confirm the current salary and qualification requirements of foreign workers. Employers may plan to increase salaries or improve skills of foreign workers in an attempt to increase the chances that their passes will be renewed.

Background: In the first half of 2013, approximately 2,600 Employment Pass holders were denied renewal of their passes. More than half of the rejected applications were from the Q1 pass category – the lowest of the three Employment Pass tiers. The industries most affected were wholesale and retail trade, professional services, and information and communications. The renewal denials have contributed to the total number of Employment Passes in Singapore falling to 172,100 as of June, from a high of 175,400 in December 2011. The denials are attributed to stricter qualifications criteria put in place by the Ministry of Manpower in January 2012.

As of January 2012, the Ministry of Manpower raised the minimum monthly salary for the Q1 Employment Pass category from SGD 2,800 to SGD 3,000. The minimum salary will rise to SGD 3,300 starting on Jan. 1, 2014. The minimum monthly salaries for the P2 and P1 categories remain the same (SGD 4,500 and 8,000, respectively). However, the minimum salary requirements generally apply to fresh college graduates, especially in the lower tiers. Older, more experienced applicants must receive a salary that reflects their work experience within the relevant industry.

BAL analysis: Businesses should remain mindful of the government’s efforts to raise the quality of foreign professionals and encourage the hiring of Singaporeans when planning their foreign staffing in Singapore. Increasing the applicant’s salary above the current minimum requirement may improve the chances of an Employment Pass renewal application being approved, especially in the Q1 category. However, employers should also encourage their foreign employees to keep upgrading their skills and education to stay ahead of tightening qualifications requirements.

This alert has been provided by the BAL Global Practice group in Singapore. For additional information, please contact singapore@balglobal.com.

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