Minimum salary for EP holders raised

PHOTO: Minimum salary for EP holders raised

From January next year, firms that want to hire skilled foreigners must pay them at least $3,300 a month, up from $3,000 now.

The change comes amid moves to improve Singaporeans' employment chances, though industry bodies have raised concerns it could lead to higher labour costs.

The new Employment Pass (EP) qualifying salary applies to young graduates from good educational institutions. Older and more experienced applicants must earn even more in order to get an EP.

The Ministry of Manpower (MOM) announced the move on Monday alongside a new framework to make firms consider Singaporeans first for professional, managerial and executive (PME) jobs before hiring foreigners.

It did not give further details on the salary requirements but said the change was "in line with rising salaries". The median starting salary for university graduates was $3,050 last year.

NTUC director for legal services and PME Unit Patrick Tay welcomed the move. "This will, in a way, level the playing field for young job market entrants," he said.

At first, the new $3,300 minimum will affect only fresh applicants, not those seeking renewals.

EP holders whose passes expire before next January will be given a one-time renewal of two or three years, based on current criteria.

Those whose passes expire between Jan 1 and June 30 next year will get a one-time renewal of up to one year.

But after June 30 next year, all EP holders will have to meet the new criteria to get their passes renewed. The MOM said this will give companies time to make adjustments.

Industry representatives had mixed views on whether the change would translate to fewer foreigners being hired on EPs.

If firms cannot find Singaporeans, the change will simply mean higher wage costs as they must still hire EP holders, said Singapore Chinese Chamber of Commerce and Industry president Thomas Chua.

"It may lead to Singaporean employers having to pay more for foreigners because of the lack of Singaporeans coming forward to fill those vacancies," he said.

The Singapore National Employers Federation shared his concern. But its executive director Koh Juan Kiat noted that the last time the EP qualifying salary was raised, the number of EP holders in Singapore did fall.

That was in January last year, when the qualifying salary rose from $2,800 to $3,000. The number of EP holders here fell from 175,400 in December 2011 to 172,100 in June this year.

With the latest change, some firms may consider hiring workers on S Passes instead, said Mr Koh. These are for mid-skilled workers earning at least $2,200 a month.

Firms which do continue hiring EP holders, however, will demand better qualifications and higher skills, given the higher cost, he added.

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