Minimum Salary Raised for Employment Pass and S Pass in Sep & Dec 2020
With an uncertain future ahead, the Ministry of Manpower (MOM) has updated the Employment Pass (EP) and S Pass requirements to encourage companies to practice a fair consideration framework for hiring employees, the result of which is to consider candidates locally prior to any foreign hires.
The EP allows foreign professionals to reside and work in Singapore, especially in high-value activities such as ICT and software. Only a Singapore company operating a real-time business can apply for an EP. We can register a company in Singapore for you, set up the reporting, and apply for an EP.
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What is an Employment Pass, also known as EP?What changes in the Employment Pass application process do I need to take note of?
What is an S Pass?
What changes in the S Pass application process do I need to take note of?
What would this mean for my company?
What would help my company increase the chances of approval when applying for an Employment Pass & S Pass?
What is an Employment Pass, also known as EP?
According to the Singapore Ministry of Manpower’s website, EPs are for foreign professionals who meet the following criteria:
- Have a job offer in Singapore.
- Work in a managerial, executive or specialised job.
- Earn a fixed monthly salary of at least S$4,500 (Older, more experienced candidates, and those working in banking, need higher salaries).
- Qualified for the job (e.g. a good university degree, professional qualifications or specialised skills).
There is no quota associated with the Employment Pass. However, based on the salary the Company is required to pay Skills Development Levy (SDL) to the Central Provident Fund Board (CPFB), for the foreign EP holders.
What changes in the Employment Pass application process do I need to take note of?
- From 1 September 2020, the minimum salary requirement for new Employment Applicants is raised to $4,500 in all sectors.
- From 1 December 2020, the minimum salary needed for applicants from Financial Services (like banking) is raised to S$5,000 for new applicants.
- For EP candidates with more work experience in their 40s, the minimum salary is now raised to $9000 across all sectors while for applicants in the financial sector, the minimum salary is expected to be at $10,000.
- For applicants renewing EPs, the new salary criteria will come into effect from 1 May 2021.
What is an S Pass?
The S Pass is for mid-skilled foreign employees (e.g. technicians) who meet these criteria:
- Earn a fixed monthly salary of at least $2,500. The salary should reflect their work experience. Older and more experienced applicants need higher salaries to qualify.
- Have a degree or diploma requiring at least 1 year of full-time study. Other technical certificates may be considered
- Have relevant work experience.
You pay a levy for your S Pass holders
There is a monthly levy of either $330 or $650 that employers need to pay, depending on how many foreign S-pass holders are working in the company.
There is a quota on the number of S Pass holders you can have in your company
From 1 January 2021, the quota will be revised to 10% for the services sector, and 18% for all other sectors, respectively.
| Sector | From 1 Jan 2021 | From 1 Jan 2023 |
| Services | Change from 13% to 10% of your company’s total workforce | No change |
Construction Marine shipyard Process |
Change from 20% to 18% of your company’s total workforce | Change from 18% to 15% of your company’s total workforce |
What changes in the S Pass application process do I need to take note of?
From 1 October 2020, the minimum monthly salary requirement for all new S Pass applicants will be raised from S$2,400 to S$2,500, with more experienced candidates requiring higher salaries.
For all S Pass renewal applicants, this new salary requirement will only take effect from 1 May 2021.
What would this mean for my company?
Review salaries to make sure they meet new minimum levels.
- If you are a director of your company in Singapore, and you’ve hired yourself on an EP here, you’d need to review your salary.
- Review your employees’ salaries to make sure they meet the new minimum levels.
See if you can still apply for S Pass instead of EP
The salary requirement for an S Pass holder is lower than an EP holder. However, you can have a limited number of S Pass holders hired in your company. This is limited by a quota which depends on which business activity is the company under.
Ana wants to hire more masseuse for her Thai Spa in Jan 2021. However, they are from Thailand. She wants to hire more of them on an S-Pass basis here. She has to look at the population of her workforce and how many of her staff plans to hire on S-Pass. As a spa is a service, she can only have 10% of her staff on S-Pass. To hire more masseuse from Thailand, she has to increase the number of local hires for other functions like sales or marketing.
If you have not yet reached the quota, you can consider switching your staff on EP to S Pass instead.
Ana has 100 staff across her chain of spas. This means she can hire 10 people on S-Pass. However, she realises she has 3 people on Employment pass and 6 people on S-Pass. She can convert one of her staff to an S-Pass.
You have to advertise more job positions to hire locals first
If you intend to hire a position for an S-Pass or Employment Pass holder, the company needs to first advertise jobs on MyCareersFuture.sg, the government job portal, for 28 days in order to make the positions known to local jobseekers. This is in line with the Fair Consideration Framework. It’s important because MOM has regularly held employers accountable for unfair hiring practices like pre-selecting a foreign candidate and disregarding a qualified local candidate. Each eligible application needs to be scanned and interviewed prior to work pass application for foreigners.
Chris wants to hire a Marketing Executive for his company which sells to Japanese customers. He wants to hire someone under the S-Pass as he thinks that it will be a cheaper cost for his company to hire a foreigner and also, due to their language expertise. However, he has to advertise on MyCareersFuture.sg for 28 days, and give fair consideration to find Singaporean staff. When he decides to select a foreign candidate, he must write down the reasons to do, otherwise, his chances for successfully applying for an S-Pass for his customers are slim.
What would help my company increase the chances of approval when applying for an Employment Pass and an S Pass for my staff?
Due to the current changes in the economy, efforts are being made to restore the employment opportunities for local candidates prior to hiring any work pass holders. If a company wishes to hire a foreigner, then a clear justification is to be provided as to why the requirement cannot be fulfilled locally.
The Ministry of Manpower will take these into consideration when evaluating your EP application:
1. Has your company supported local Professionals, Managers, Executives and Technicians (PMETs) to keep their jobs through the different government support grants as far as possible?
2. Have you as an employer responded to government efforts to recruit and train more Singaporean PMETs?
3. Have you discriminated against qualified Singaporeans?
Check whether an EP applicant qualifies for an Employment Pass or S Pass
You can use the Employment / S Pass Self-Assessment Tool (SAT) before you apply or renew for an EP. This is an online tool to check if you qualify for an Employment Pass based on the information provided, such as your salary, educational qualifications and work experience. It’s available free and 24h on the website.
Take note, however, it cannot guarantee the actual outcome of your application. There are other checks like your company’s business contribution within the region, encouragement of local hires etc. that are not considered in this assessment.
If the current and future changes are happening too much for you to track and you need advice for a specific situation in your company, do talk to our experienced corporate secretaries in Singapore.
