Work permit holders will no longer have limit on employment period, maximum age to rise to 63

SINGAPORE: Singapore is making substantial changes to its work permit framework in a bid to give employers greater flexibility in hiring and retaining talent.

Starting Jul 1, work permit holders will no longer be subject to a maximum employment period, which currently ranges from 14 to 26 years based on skill level, sector and country of origin.

This aligns with policies already in place for workers from Malaysia and four North Asian sources – Hong Kong, Macau, South Korea and Taiwan – who already have no restriction on their period of employment.

Work permit holders will still be subject to a maximum age of employment. This will be raised from 60 to 63 on Jul 1, in line with the local retirement age.

The age limit for new work permit applicants will also be raised to 61, up from the current 50 for non-Malaysians and 58 for Malaysians.

The changes were announced on Thursday (Mar 6) as part of the Ministry of Manpower's (MOM) spending plans for the coming financial year.

MOM said raising the maximum employment age would give firms the flexibility to retain more experienced and skilled workers.

It added that employers are best placed to assess the benefits of retaining their more experienced workers, against the higher health insurance costs they would have to bear for these older workers.

As of June 2024, Singapore had about 843,400 work permit holders, excluding domestic workers. This figure represents an all-time high, exceeding pre-pandemic levels by 17 per cent, according to Manpower Minister Tan See Leng.

Speaking in parliament on Thursday, Dr Tan said that scepticism about the need for foreign talent was natural.

"When we see a foreigner, we think, 'they are taking a job a local could have had'. But what is harder to see is that, without the access to foreigners, the company and its jobs may not even be in Singapore to begin with," he said.

"So it's very easy to use simplistic arguments to insinuate that it's a zero-sum game. That if you remove one foreigner, you get one more job for a local," said Dr Tan, as he referred to a speech earlier in the day by Non-Constituency Member of Parliament Leong Mun Wai.

"Let me share the facts," the minister said.

Dr Tan said that over the last decade, the number of employment pass and S Pass holders grew by 38,000, while the number of resident professionals, managers, executives and technicians (PMETs) grew by 382,000 – a 10-fold difference.

"We should never develop a 'Singaporean only' mentality, because this would deprive us of talent needed to anchor global businesses that benefit Singaporeans."

MORE NON-TRADITIONAL SOURCES, OCCUPATIONS

In view of industry demand, MOM will also broaden the list of non-traditional sources for work permit holders.

From Jun 1, Bhutan, Cambodia and Laos will be added to the list, which already includes Bangladesh, India, Myanmar, the Philippines, Sri Lanka and Thailand.

Additionally, from Sep 1, the range of occupations that can be filled by workers from non-traditional sources in the manufacturing and services sectors will expand to include cooks, heavy vehicle drivers and manufacturing operators.

The list currently has nine occupations – five manufacturing roles, cooks in Indian restaurants, food processing workers, hotel housekeepers and hotel porters.

Singapore's typical sources of labour for manufacturing and services are Malaysia and China, as well as Hong Kong, Macau, South Korea and Taiwan.

The non-traditional sources occupation list was introduced in 2023 to allow firms to hire workers from other sources to fill certain jobs that have pressing manpower needs, have low take-up by locals and are harder to automate.

Employers seeking to hire workers from these sources must offer a minimum monthly salary of at least S$2,000, and keep the sub-dependency ratio of such work permit holders under 8 per cent.

This is to safeguard local wages, ensure that employers are hiring higher-skilled or more experienced workers, and guard against over-reliance on non-traditional source workers, MOM said.

Including migrant domestic workers, there were close to 1.14 million work permit holders in Singapore in June 2024.

HIGHER S PASS QUALIFYING SALARY

The Manpower Ministry will also raise the qualifying salary for S Pass holders – skilled migrant workers who perform specialised roles – from S$3,150 to S$3,300. This is the third and final step to progressively increase the qualifying salary, as announced in Budget 2022.

The qualifying salary will continue to increase progressively with age, up to S$4,800 for candidates in their mid-40s.

The financial services sector, which has higher wage norms, will continue to have a higher S Pass qualifying salary, rising from S$3,650 to S$3,800. This will increase progressively to S$5,650 for candidates in their mid-40s.

The changes take effect for new S Pass applications from Sep 1 this year and renewal applications from Sep 1, 2026.

The S Pass Tier 1 levy, which applies to up to 10 per cent of a firm's workforce, will also go up from S$550 to S$650 from Sep 1. This will align it with the Tier 2 levy, which applies to the next 5 per cent of a firm's workforce.

MOM said it had heard concerns about rising costs of manpower and constraints in hiring and therefore moderated the increase in the qualifying salary to give businesses more time to adjust.

Dr Tan also provided an update on the points-based Complementarity Assessment Framework (COMPASS), which has been used to evaluate new employment pass applications since Sep 1, 2023, and renewals since Sep 1, 2024.

He said about 30 per cent of the current employment pass stock had passed through COMPASS, and early results suggested "we are moving in the right direction".

The share of firms with higher dependence on foreigners of a single nationality has fallen by 7 per cent, while the share of firms with higher dependence on foreigners generally has reduced by 15 per cent.

These firms also created 4,000 more PMET jobs for locals, said Dr Tan.

ENHANCEMENT OF M-SEP SCHEME

The ministry also announced enhancements to the Manpower for Strategic Economic Priorities (M-SEP) scheme.

M-SEP, launched in December 2022, allows companies that have expansion plans to temporarily hire more S Pass and work permit holders beyond industry quotas.

From May 1, the scheme's support period will be extended from two to three years. Firms must still meet two conditions to qualify.

First, they must be contributing to Singapore's key economic priorities by promoting investments that support the country's hub strategy, engaging in innovation and research and development, or supporting internationalisation.

Second, they must commit to hiring and training local workers, either by increasing the size of the local workforce, sending workers for training that results in job enhancement, or participating in selected qualifying programmes.

From May 1, another pathway will be added to the second condition, where firms that commit to sending locals on overseas exposure or leadership programmes can qualify. MOM will also expand the list of eligible programmes recognised under the two conditions.

Editor's note: This article has been edited to correct the number of work permit holders that is referred to in Minister of Manpower Tan See Leng's speech as being 17 per cent above pre-pandemic levels. The original information was provided by MOM, which subsequently advised it was incorrect.