18th March, 2024: Singapore Government has implemented new regulations regarding minimum wages for foreign workers, particularly focusing on the Employment Pass (EP) policy.
The Ministry of Manpower (MOM) has announced adjustments to the EP minimum qualifying salary, increasing it from $5,000 to $5,600 per month. This increment will be progressively raised with age, reaching up to $10,700 for individuals in their mid-40s. These changes aim to maintain equitable opportunities for local employees across all age demographics.
The EP is a work permit that allows foreign professionals, managers, and executives to be employed in Singapore. The minimum qualifying salary for the EP is based on the top one-third of local PMET1 wages, ensuring that EP holders meet high-quality standards. The qualifying salary is reviewed annually against this benchmark.
In specific sectors like Financial Services, where wage norms are higher, a higher EP-qualifying salary applies. For instance, the EP minimum qualifying salary in the Financial Services sector is increasing from $5,500 to $6,200 per month, with a further progression based on age, up to $11,800 for individuals in their mid-40s.
These revised EP qualifying salary adjustments will impact new EP applications starting from 1 January 2025, and renewal applications from 1 January 2026.
Moreover, the Singapore government is also raising the local qualifying salary (LQS) limit, which mandates that firms paying foreign workers must also pay their local employees at least the LQS. The LQS is being raised from $1,400 to $1,600 per month, ensuring a minimum payment of $1,600 per month for full-time local workers or a minimum of $10.50 per hour for part-time local workers. These modifications will come into effect on 1 July 2024.
Furthermore, policy changes in the Marine Shipyard sector involve adjustments to the Dependency Ratio Ceiling (DRC) and levy rates for Work Permit Holders (WPHs). The DRC is decreasing from 1 local employee to 3.5 WPHs, to 1 local employee to 3 WPHs. Additionally, levies for ‘Basic Skilled’ WPHs will rise from $400 to $500, and for ‘Higher Skilled’ WPHs, from $300 to $350. These changes will be implemented from 1 January 2026.
In conclusion, the modifications to the EP qualifying salary, LQS limit, and policies for the Marine Shipyard sector by the Singapore government reflect efforts to enhance the working conditions of foreign workers and ensure fair wages in the country.