SINGAPORE : Fair Consideration Framework and new Qualifying Salary

On the 23rd of September it was announced by the Singapore Ministry of Manpower (MOM) that there will be new rules in 2014 which will require large companies to give fair consideration to nationals of Singapore through advertising before hiring foreign nationals to fill positions. The goal of the Fair Consideration Framework (FCF) is to ensure Singaporeans have fair access to new employment opportunities before a company seeks to bring in a foreign worker.

The Advertising Requirement

These new rules will take effect from the 1st August 2014. They will require employers to advertise their job vacancies on a new job bank administered by the Singapore Workforce Development Agency for 14 days before applying for an Employment Pass (EP) for a foreign national. It should also be noted that any Employment Pass application made, in order to hire a foreign national for an advertised job role, should be made less than 3 months after the closing date of the job advertisement. The new job bank will be launched in mid-2014.

There are certain  exceptions to the rules for companies with 25 or fewer employees, and for jobs with monthly salaries of at least S$12,000.

Extra Scrutiny

MOM will also identify employers with low numbers of Singapore national employees at executive, management and professional levels, as well as companies with repeated complaints of nationality-based or discriminatory hiring practices. MOM will then request additional information from these companies. These firms will be notified directly by MOM, in early 2014, of the additional scrutiny that will be applied to them.

Examples of the additional scrutiny include the employer being required to:

–          Provide organizational charts showing employee nationality.

–          Provide evidence of recruitment processes.

–          Provide evidence of staff grievance handling procedures.

–          Provide evidence of their staff progression framework.

–          Provide development plans for local staff to advance to higher roles / plans that show other ways of reducing the number of foreign nationals being hired to fill roles.

If MOM determines that an employer has still not shown improvement in their recruitment and training practices, it will introduce further measures, including longer processing timeson their EP applications. The MOM may also require that the company does not displace any similar Singaporean employee within 60 days calendar days of renewing EPs. In more serious situations, some companies may lose their privileges for hiring foreigner workers.

New EP Qualifying Salary

From 1st January 2014 the income threshold required for being granted a new Employment Pass will be raised from S$3000 to S$3300 per month, which will be dependent on the candidate”s qualifications and experience. This is to keep practices in line with the rising salaries in Singapore.

Transitional Measures – Qualifying Salary

In the meantime, there will be transitional measures for existing Employment Pass holders in Singapore, before the new rules come into force.

Existing EP holders whose passes expire:

–          Before 1 January 2014 will receive a one-time renewal based on the existing EP criteria.

–          Between 1 January 2014 and 30 June 2014 (inclusive) will receive a one-time renewal of up to one year on the existing EP criteria.

–          After 30 June 2014 will have to meet the new salary criteria in order to receive a renewal of their EP.

These changes to the rules in Singapore are indicative of a tougher regime for employers in what continues to be a difficult economic climate.  Lead in times for the hiring of foreign workers is bound to increase with the additional advertising requirements.  It also will remain to be seen how many companies are subject to additional scrutiny. 

If you require further information on any of the above, please do not hesitate to contact us.

Contact Newland Chase