Higher EP minimum pay puts strain on workers, companies

PHOTO: Higher EP minimum pay puts strain on workers, companies

Filipino assistant retail manager Jovie Pascual, 36, is unsure about his future in Singapore.

He is unlikely to get permanent residency as he was downgraded from holding an Employment Pass (EP) to a lower-skilled S Pass in August. Non-EP holders usually find it difficult to become permanent residents.

His monthly pay of $2,800 did not make the EP cut after the qualifying salary was raised from $2,800 to $3,000 in January last year.

"I love living here. If possible, I want my daughter to take up citizenship. But I am not sure if this will happen now," he said.

He is not alone. A growing number of EP holders have been pushed down to S Passes, raising concerns for both foreign workers and local employers.

There are quotas and levies for S Passes - limitations and expenses which do not apply to EPs.

By squeezing workers into the S Pass band, the authorities are making it less attractive for firms to employ foreigners.

Foreigners would also find it more difficult to stay here permanently.

From January last year to June this year, 9,600 EP holders were switched to S Passes.

Another 14,200 S Pass holders did not have EPs previously, but could have qualified under the old rules, according to figures from the Manpower Ministry.

It is likely that more will be bumped off to the S Pass category when the salary criterion for EP holders goes up again.

From next year, EP applicants must earn at least $3,300 a month, up from $3,000 now, following an announcement last month. This is for young graduates; older and more experienced applicants will have to earn even more.

Foreign workers and employers said the measures have caused upheavals to their plans.

Filipino IT engineer Henry, who declined to give his full name as he is not authorised to speak to the media, also wanted permanent residency. But he was downgraded to an SPass in June despite earning $4,500 a month.

"I want to stay here long term and bring my mum over, so I was very disappointed when I was downgraded," he said.

Firms, too, face pressures. First, there are monthly levies for S Passes: $300 a worker if SPass holders form less than 10 per cent of headcount, and $450 otherwise. There are no levies to hire EP holders.

Another disadvantage of the SPass is that, unlike the EP, it is subject to quotas. S Pass holders can form no more than 15 per cent of a service firm's headcount, and no more than 20 per cent of headcount in other sectors.

Creative firm Alchemy Partnership is one business which is feeling the squeeze, as it has reached its S Pass quota. Of his firm's only EP holder, executive director Raj Mulani said: "I wouldn't mind if he was downgraded, except that we are already at our limit."

Other bosses, such as LSK Engineering managing director Roger Heng, are hoping that they can keep their workers on EPs by raising their salaries. His firm has about 20 engineers on EPs.

"If they are good then we have to look at how we can increase their pay, maybe by giving them more responsibilities," he said.



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