The first quarter of 2020 has seen some unprecedented changes to employment law across the globe.
Whilst we all get used to new ways of working, it is important to remember that many planned legislative changes will still come into effect, and companies will need to demonstrate compliance with those new laws, regardless of the wider economic and legal outlook. Here’s an update on the regulatory changes to the employment law landscape in Singapore during the first half of 2020:
Increase in Employment Pass Qualifying Salary
With effect from 1 May 2020, the minimum qualifying monthly salary for a new Employment Pass (“EP”) will be raised from S$3,600 to S$3,900. As the Ministry of Manpower generally requires more experienced candidates to earn a higher monthly salary in order for them to qualify for an EP, the minimum qualifying salary for these individuals will also be raised accordingly – although there is no specific quantum provided. It should be noted that the Minister, when announcing these changes, suggested anecdotally that these candidates “will need to earn around double” the new minimum qualifying salary.
For EP renewals, the increase in qualifying salary will take effect from 1 May 2021, giving businesses more time to adjust salaries upwards to meet this new threshold.
Updates to the Fair Consideration Framework
The Fair Consideration Framework (“FCF”), which was implemented in 2014, contains certain rules which require employers to advertise roles and consider local candidates before they are able to hire foreign workers under an EP. From 1 May 2020, changes will be introduced to the exemption criteria and earlier in 2020 administrative penalties for any non-compliance were toughened.
Previously, companies were exempted from the advertising requirement if they met any one of the criteria below:
- If the company has less than 10 employees;
- If the fixed monthly salary for the role is S$15,000 or more;
- If the vacancy is filled by an intra-corporate transferee as defined by the World Trade Organisation’s General Agreement on Trade in Services; or
- If the vacancy is short term (i.e. for less than a month).
From 1 May 2020, condition (ii) will be raised to S$20,000.
To give the FCF more teeth, the administrative penalties were raised earlier this year across the board for greater deterrence. Firstly, the minimum period of work pass debarment has doubled from 6 months to 12 months. For egregious cases, the debarment period can be up to a maximum of 24 months.
Secondly, the scope of the debarment has been expanded to include work pass renewals, in addition to not being able to apply for any new work passes.
Finally, the Ministry of Manpower will prosecute errant employers or key personnel who make false declarations that they have considered all candidates fairly. Employers convicted of making false declarations may face imprisonment for up to 2 years, or a fine of up to S$20,000, or both.
Please feel free to get in touch with us for more information on how your business can remain compliant with these updated legislative changes.
For information on the COVID-19 measures that have been introduced in Singapore this year, please take a look at our resources here, or get in touch.
Calvin Cheng is an Associate at Taylor Vinters Via in Singapore specialising in corporate and employment work. Katie Allen is a UK qualified lawyer currently based in Singapore to provide in-time-zone legal and HR support for multinational clients across the APAC region.