New MOM Law: Dependant Pass Holders To Apply for Work Passes From May 1 2021
Starting 1 May 2021, Dependant Pass (DP) holders who are currently working with a Letter of Consent (LOC) in Singapore will be allowed to continue working until the validity of their current approved Letter of Consent. Subsequent to that, they will need to apply for a work pass in Singapore- either an S Pass or an Employment Pass, or work permit. Previously, if DP holders wanted to work in Singapore, a Letter of Consent had to be applied to the Ministry of Manpower by the employer, upon the approval of which they could start their employment.
What Happens After the LOC Expires?
Employers will need to apply for a work pass such as an employment pass, S Pass or work permit for DP holders, and any qualifying salary, dependency ratio ceiling and levies will apply. The change aims to bring people in line with the requirement for other foreigners working in Singapore, according to Singapore’s manpower minister Josephine Teo.
I Am a DP Holder Running a Business, How Am I Affected?
If DP holders who run local businesses are either operating as the sole proprietor, a partner, or a director with at least 30% of the shares of the company and creating employment at their local locations, a letter of consent will allow them to continue to work their businesses. However, there are conditions.
For the business to meet the local employment requirement, it must hire at least one Singaporean or permanent resident earning at least S$1,400 and pay contributions to the employee's Central Provident Fund (CPF) account for at least three months.
For current DP holders who fail to meet the new criteria, they can continue working until their current letter of consent expires, but the work pass application must be made before the letter of consent expires for them to continue working with the company. There is also a one-off extension that can be applied for the letter of consent until 30 April 2022 while renewing the DP.
Starting May 1 2021, foreigners living in Singapore on Dependant Passes (DP) will now need a work pass rather than a Letter of Consent in order to work.
With this change, spouses and other dependents of Employment Pass (EP) and S-Pass holders will face the same requirements as other foreigners who want to work here.
Employers will need to apply for an EP or S Pass permit. The relevant qualifying salary, dependency ratio ceiling, and levy will apply.
FACT
As of June 2020, there were about 1.1 million work pass holders in Singapore, excluding foreign domestic workers, which suggests there were about 11,000 Dependant's Pass holders working on letters of consent. LOC holders make up around 1 per cent of all work pass holders.
As an Employer, What Can I Do to Keep My Staff on Dependant Pass?
It can get confusing.
Get some clarity on the difference between an Employment Pass and S Pass.
As Dependant Pass holders must now apply for a work permit, employers must either hire more locals to adhere to the dependency ratio ceiling, which is the maximum ratio of foreign workers to the total workforce that a company can employ depending on the sector it is in OR increase the pay of the employee to hit the S-Pass minimum criteria of S$2,500.
Singapore is home to a large number of foreign entrepreneurs who use their ability to work to start up new businesses. With this new change, businesses will need to adopt hiring strategies to look at a wider pool of candidates.
