Singapore Update: Topline Issues – Employment (September 2022)

There have been important developments in the past 6 months or so (e.g. restoration of the Fair Consideration Framework (“FCF”) job advertising duration from 28 to 14 days, introduction of new types of work passes, potential issues relating to workplace discrimination in the context of the repeal of Section 377A of the Penal Code, as well as to workplace safety and health). Also, following the Finance Minister’s February Budget 2022 speech, some of the changes mentioned then have come into effect on 1 September 2022 (e.g., increases in minimum qualifying salaries for work passes, and expansion of the progressive work model). Below, we share key highlights along with our brief comments.

A.           Enhancements to Work Pass Framework

1.            On 29 August 2022, the Ministry of Manpower (“MOM”), the Ministry of Trade and Industry and the Ministry of Communications and Information announced four enhancements to Singapore’s work pass framework. These are:

(a)          Introduction of the new 5-year Overseas Networks & Expertise Pass (“Pass”). The Pass will apply to individuals with a fixed monthly salary of $30,000 and above (with exceptions for individuals with outstanding achievements across certain fields). Pass holders may concurrently start, operate, and work for multiple companies in Singapore at any one time. They are not subject to the Fair Consideration Framework job advertising requirement (“FCF advertising requirement”), nor the upcoming points-based Complementarity Assessment Framework (“COMPASS”). Applications for the Pass are open from 1 January 2023.

(b)          Introduction of a 5-year EP. A 5-year EP will be introduced for experienced professionals filling specific tech occupations listed on the COMPASS Shortage Occupation List. Applicants must earn a fixed monthly salary of at least $10,500 (increasing with age) and pass COMPASS (with at least 10 points on the Diversity criterion). Applications for the 5-year EP are open from 1 September 2023.

(c)           Introduction of new benchmarks pegged to the top 10% of EP applicants. The exemption bar for the FCF advertising requirement and the upcoming COMPASS shall be raised from the current S$20,000 to $22,500. EP applicants with salaries lower than the threshold must pass the FCF advertising requirement and COMPASS. The higher exemption bar shall take effect from 1 September 2023.

(d)          Restoration of FCF advertising requirement duration for EP applications. The FCF advertising requirement duration has been restored (from 28 days) to 14 days for EP applications, with effect from 1 September 2022. Separately, the processing time for all EP applications has also been reduced from around 3 weeks to 10 business days.

2.            The changes introduced are significant as it has the potential to change the work landscape considerably. The increase in the salary threshold to S$22,500 from the current S$20,000 is a reflection of rising salaries in Singapore and the need to ensure Singaporeans are not left out. Yet, the changes are also practical in that the duration of the advertising period has been shortened along with the other changes to ensure that promising talent is brought into Singapore and to encourage knowledge transfer. As employers, you may wish to review your employee base to consider where changes may need to be made.

B.           Workplace Discrimination in the Context of Repeal of Section 377A

3.            On 21 August 2022, the Prime Minister announced that Section 377A of the Penal Code would be repealed, decriminalising gay sex. On 22 August 2022, the Law Minister reminded the nation that: “Workplaces should be part of the secular space shared by all Singaporeans. They should not be places where people are compelled or pressured to participate in, or support, non-business related causes. Employees should not be discriminated against at work just because they hold traditional family values or pro-LGBT values.”

4.            This is an important reminder for businesses to exercise caution and sensitivity on the subject whether at the point of hiring or in the course of management through various activities. For example, where there are non-business related causes related to the subject, employees must not be, or must not feel compelled to participate. On hiring, this is not to say that depending on the nature of the organisation, that pre-qualifications cannot be stated.  We recommend companies to review their handbooks, policies and protocols on the subject matter to ensure that the content does not give any misimpression of discrimination.

C.           Workplace Safety and Health matters

5.            On 12 August 2022, the Workplace Safety and Health (“WSH”) Council launched a public consultation on the Draft Code of Practice on Chief Executives’ and Board of Directors’ WSH Duties (“Code”). The aim of the Code is to ensure that Directors prioritise WSH and set the safety culture for their organisations. This calls for the matter to be clearly brought forth as a board agenda item and for careful attention to be paid to it. For businesses where this is not already done, appropriate steps need to be taken. The consultation closes on 8 September 2022. We would be happy to discuss this and assist with submissions if required.

6.            Separately, on 1 September 2022, the MOM introduced four new measures to strengthen workplace safety and health and improve oversight. This includes a “Heightened Safety” period from 1 September 2022 to 28 February 2023. During this period, if MOM finds serious lapses such as unsafe workplace conditions or poor risk controls following serious or fatal workplace accidents, it will debar companies from employing new foreign employees for up to 3 months, and require Chief Executives to personally account to MOM and take responsibility for rectifications.

7.            In addition, companies in certain industries (construction, manufacturing, marine, process or transport and storage industries; and companies in other industries using heavy or industrial vehicles) are required to conduct a mandatory Safety Time Out during the period of 1 September to 15 September 2022. If the Safety Time Out is not done by 15 September 2022, MOM will debar companies form hiring new foreign employees for 1 month.

8.            Note that there has been increasing scrutiny on matters relating to workplace safety and health this year. We expect the regulator to step up enforcement efforts. Compliance with the Code and/or Safety Time Out is potentially also a mitigating factor in case of any WSH offence. Hence, it is critical to keep abreast of the consultation and to conduct the Safety Time-Out as required. It is especially critical to take on board the guidelines being prescribed through the Code as discussed at paragraph 5 above.

D.           [Reminder] Increase in Minimum Qualifying Salaries for Employment Pass (“EP”) and S-Pass holders

9.            Please be reminded that since 1 September 2022, the minimum qualifying salaries for new applications for EP and S-Pass holders has been raised as follows:

(a)          EP – $4,500 to $5,000 (and for the financial services sector, from $5,000 to $5,500); and

(b)          S Pass – $2,500 to $3,000 (and for the financial services sector, from $3,000 to $3,500).

10.         The above qualifying minimum salary increases progressively with age. The changes apply to renewal applications only from 1 September 2023 onwards.

E.            [Reminder] Expansion of Progressive Wage Model (“PWM”)

11.         The PWM is being progressively expanded. Please be reminded that the first round of expansion has come into effect from 1 September 2022. For businesses employing any foreign worker, the PWM expansion requires them to pay:

(a)          progressive wages to their local in-house cleaners, security officers and landscape maintenance workers;

(b)          progressive wages to their local cashiers, retail assistants, retail supervisors and retail managers (if the business is in the retail sector);                                                         

(c)           all their local workers at least the local qualifying salary, which is currently $1,400.

12.         There are further expansions planned across 2023. Do look out for them. In particular, the PWM will also be extended to other specific roles in all sectors, namely, administrators and drivers by 1 March 2023.

Employment law continues to develop quickly and the trend is towards more robust compliance requirements for employers and stronger protection for employees. Do look out for developments and re-assess them against the existing protocols or documentation you have, which can become outdated quickly. For example, do factor in the updated FCF advertising requirement timelines, and if you have not already done so, review the COMPASS criteria early to better plan your manpower pipeline. If you are operating in one of the designated industries, please also ensure that you do your Safety Time-Outs urgently.

By RAJAH & TANN LLP, Singapore, a Transatlantic Law International Affiliated Firm. 

For further information or for any assistance please contact singapore@transatlanticlaw.com

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