EP Minimum Salary Raised to $3,900, Ensures Level Playing Field

Employment Pass Minimum Salary Raised to $3,900 to Ensures Level Playing Field

 

Salary for Employment Pass Workers in Singapore to Rise From May 2020

Employment Pass (EP) minimum salary rates in Singapore will increase from May 2020, applicable to all foreign workers hired under the EP structure.

The raise from the $3,600 minimum monthly to now $3,900 is a move to ensure foreign workers are competitively on a level playing field. Singapore’s Ministry of Manpower (MOM) introduced the raise to be in line with the raise in wages for fresh graduates from Singapore’s local universities.

Older and more experienced employees will also have their EP minimum salary increased. An applicant in their 40s, for example, will be eligible for approximately double the $3,900 minimum qualifying wage. The raise is appropriate given the experience and qualifications an experienced, older employee is expected to have. It also levels the playing field for Singapore’s local professionals, managers, executives and technicians (PMETs).

The new EP minimum salary rates will only come into effect from 1 May next year for those renewing their EP. This is to help moderate the impact that this raise is going to have on businesses. Additionally, a local employee’s minimum salary will count towards the company’s foreign worker hiring quota.
 

S Pass Minimum Wage Rates to Rise From July 2020

S Pass minimum wage rates will also be increased come July this year from $1,300 to $1,400. The last raised for S Pass workers took place in July last year. Wages are regularly increasing to be on par with the local wages that are also rising. Local workers who are earning less than $1,400 should be eligible for some relief. The relief is provided by Singapore’s Wage Credit Scheme.

Employers in Singapore are encouraged to continue ensuring that their pay practices are merit-based and fair. These practices should be aligned with the Tripartite Guidelines for Fair Employment Practices.

MOM is aware that some companies are freezing the salaries of the local workers to meet the rising wages of EP holders. This is happening even though some local workers may be performing better. Such practices are going to put these companies at risk of curtailing their work pass privileges and at risk of struggling to retain local employees. As such, MOM is planning to step up their measures to ensure that there is fair hiring going on in these workplaces.

Singapore’s Fair Consideration Framework (FCF) was updated this January. Among the new updates introduced are stiffer penalties for employers found practising discriminatory hiring. Especially if this is happening against locals.

All employers must advertise any job vacancies on the MyCareers-Future.sg portal. This must be done before they can submit any EP applications. Beginning May, the job vacancies advertised will expand and incorporate jobs that pay up to $20,000 monthly. This will be an increase from the $15,000 currently. Senior positions will continue to be exempted as the requirements may be more market sensitive.

MOM fully intends to start using data analytics and begin scrutinising all EP applications. MOM will be following up actively on leads given by whistle-blowers.  Approximately 1,000 companies are on the FCF watch list. This is an increase from last year’s 600. Ever since 2016 when the FCF list was first introduced, 3,000 applications for EP have either been rejected or withheld by MOM. Some applications have also been withdrawn by the employers.

MOM is planning to take action against firms that have violated the Tripartite Guidelines on Fair Employment Practices. Currently, this stands at 18 firms.

The last minimum wage raise happened in 2017. During this time, EP salaries were increased from $3,300 monthly to $3,600 minimum.