Singapore is one of the most business-friendly countries in the world, coming in second after New Zealand in 2018. As such, many new employers are surprised to learn there are significant challenges to hiring foreign talent. The practice is heavily regulated by the Ministry of Manpower (MOM).
Every foreign employee who comes to Singapore needs to have a valid pass or work visa. For foreign professionals, managers, and executives, this comes in the form of an Employment Pass (commonly known as E Pass).
But the process of obtaining a work pass isn’t always smooth. We’ve prepared a list of the most common hurdles companies face when getting a Singapore employment pass or work visa approved.
1. The Fair Consideration Framework (FCF) has been tightened
The FCF is not new. It was passed in 2014, and instituted to prevent discrimination based on age, gender, nationality, or race. This includes discrimination against Singaporean citizens and permanent residents (e.g. favouring a foreigner over a local for non-job-related reasons).
In July 2018, however, the FCF was significantly tightened:
- When Singapore-based companies want to hire foreign employees, they have to first advertise the position on the National Jobs Bank, a government-run jobs portal. The advertisement must stay on the National Jobs Bank for at least 14 days. This pertains to all companies with 10 or more employees, and for all positions with a salary below $15,000 per month.
(Prior to 2018, this only applied to jobs with a salary of $12,000 a month or below, and only to companies with at least 25 employees).
- Harsher penalties are in place for employers deemed to be violating the FCF. As of January this year, firms found to be favouring foreigners will be unable to apply for new work passes for 12 to 24 months (the previous penalty was just six months). These firms also cannot renew existing work passes.
- The minimum salary to get an S-Pass has increased to $2,400 per month. An S-Pass is a work visa for mid-skilled employees (see point 3).
While most firms are happy to be transparent and adhere to the FCF, this still places administrative demand on businesses. For example, if you’re a business owner, the onus is on you to ensure your hiring managers or Human Resource staff keep to the FCF.
Consider, for instance, a logistics company in which the hiring staff falsely declared they had interviewed and considered two Singaporeans before hiring a foreigner. This could result in a fine of up to $20,000, along with the other penalties mentioned above. As such, you’ll have to ensure your hiring staff (or yourself) are rigorous in documenting all their interviews and hiring procedures.
In addition, great care has to be taken in writing job ads for the National Jobs Banks. You can see these extensive guidelines detailing phrases to avoid. Making later changes to the ad, such as changing the pay range, will require you to keep the ad open for another 14 days.
You can read more about the FCF here.
2. Approval of work visas has become more difficult and expensive
In 2017, Singapore saw the biggest drop in foreign worker numbers in 15 years. The number of work permit rejections has risen as the government grows more stringent.
This is compounded by rising fees for work pass applications: the fee for an Employment Pass has risen from $70 to $105, while an S-Pass application has risen from $60 to $75. The cost of renewing work passes, every two years, has also gone up.
As such, you should be prepared to write more appeal letters, and better screen your candidates (so you don’t waste money on an application likely to fail). Bear in mind that repeated rejections and applications mean mounting costs. For more on this, see point 3 below.
Also note that an appeal against a failed application can take three weeks to process. In addition, MOM does not entertain in-person appeals. You will have to spend time writing the required appeal letters, and filling in forms.
This can result in significant work delays, so do account for the impact on operations (e.g. your company may be down a programmer or delivery driver for an extra month, if you need to appeal).
3. You may need to make special appeals for very new or unusual job roles
MOM typically looks at a prospective worker’s educational background and experience in regards to a role. This is straightforward for common roles like accountants, IT professionals, procurement officers, and the like.
However, if your business has experimental elements (e.g. an ecommerce start-up that needs a designer for gamification), then paper qualifications may not apply. MOM is willing to look beyond this if appropriate skills and experience matter—but you must be prepared to explain the concept to them. So for employees with unconventional skill sets, approval for their work pass may be more complex.
On the flip side, be aware that having the right academic qualifications also doesn’t mean automatic approval. MOM may ask for proof of your worker’s past projects, or ask questions about their degree, doctorate, etc. You may need to consult your worker on these.
There are more details that you will need to consider when hiring a foreign worker. You can learn more from our guide, or simply make an appointment with our experts.
Bonus: Good-to-knows for S-Passes and Work Permits
Lanturn specialises in work visas for PMETs (professionals, managers, executives, and technicians), and currently does not handle S-Passes and Work Passes. However, we believe you may value this information if/when you hire less-skilled workers or service staff.
Foreign worker quotas can result in levies and restrictions
There are different types of work passes in Singapore. The three general types are the E-Pass (professionals and managers earning at least $3,600 per month), S-Pass (technicians and mid-skilled workers earning at least $2,300 per month), and work permits for foreign workers (semi or unskilled labour, from a provider recognised by MOM).
There are restrictions on how many pass holders of each type you can employ based on your service sector. You can check the quotas online with MOM.
There are also foreign worker levies that you have to pay to hire foreigners. You can check the amount on the MOM website.
You need to put down a security bond when applying for a Work Permit
A security bond of $5,000 is required for each non-Malaysian foreign worker (the worker in question cannot be asked to pay the bond). You need to buy the bond from a bank or insurer before your worker arrives, and processing time is about three days.
If something goes wrong and the bond is not processed on time, you will have to pay to send your worker home when they arrive. As such, you need to be exacting and careful in the relevant paperwork; especially if you’re employing multiple foreigners, who are all arriving at different times throughout the year.