Singapore: Foreign Worker Levies to Gradually Increase Over the Next Three Years, Starting July 1, 2010
Singapore: Foreign Worker Levies to Gradually Increase Over the Next Three Years, Starting July 1, 2010
Companies that sponsor “S” Pass and Work Permit holders will be required to pay increased foreign worker levies starting on July 1, 2010. For “S” Pass holders, the monthly levy per foreign worker will be raised to SGD100-120 (approximately US $71 – $85) beginning July 1, 2010, and gradually increase to a maximum of SGD150-250 by July 2012. For Work Permit holders, the changes to the levy tiers and rates will be based on the employer’s industry sector.
Beginning July 1, 2010, employers that sponsor “S” Pass and Work Permit holders will be required to pay increased monthly levies for their foreign employees. The levies will increase gradually in stages through July 1, 2012. By increasing the levies, Singapore’s Ministry of Manpower (MOM) seeks to regulate the demand for “S” Pass and Work Permit holders and encourage hiring of local workers and foreign nationals with higher skills and qualifications.
The MOM also announced that it will increase monitoring and enforcement activities against employers that attempt to recover levies from their foreign workers, whether directly or indirectly. Employers that do so may face prosecution and may be prevented from hiring foreign workers.
“S” Pass
The MOM is introducing a new two-tier levy system for holders of “S” Passes, a type of employment pass for middle-level skilled foreign workers earning a basic salary of at least SGD1,800 a month. Employers will be required to classify their “S” Pass holders into two tiers: (i) a basic tier comprised of the “S” Pass holders that make up less than 20 percent of the employer’s total workforce, and (ii) a second tier consisting of remaining “S” Pass workers that make up 20-25 percent of the company’s total workforce. Note the “S” Pass quota limits the number of “S” Pass holders an employer can hire at 25 percent of the company’s total workforce.
The monthly levy per “S” Pass holder will be raised from the current rate of SGD50 to SGD100 for the basic tier, while a new rate of SGD120 will be introduced for the second tier. These levy rates will be adjusted every six months until July 1, 2012, when the basic tier levy will reach a maximum of SGD150 while the second tier levy will reach a maximum of SGD250.
Work Permit
The new levy tiers and rates for Work Permits, a type of employment authorization for unskilled and semi-skilled foreign workers with a basic monthly salary of less than SGD1,800, will be based on the sponsoring employer’s industry sector (e.g. manufacturing, services, or construction). The changes are very detailed, but in general, there will be a greater differentiation in levy rates between skilled and unskilled Work Permit holders.
Full details of the changes to the levy rates and tiers for “S” Passes and Work Permits are available on the MOM’s website by clicking here.
The content of this alert is provided for informational purposes only. If you have any questions, please do not hesitate to contact the global immigration professional with whom you work at Fragomen Global Immigration Services or send an email to SGInitiations@fragomen.com.
Source: Fragomen
