Minimum wage for new EP applicants to be raised to $5,600

A raft of changes to the foreign work pass system are set to keep up the skills bar of Singapore’s foreign workforce at all levels, while ensuring Singaporeans can get good jobs and enterprises here pursue innovation.

Chief among these changes are an increase in the Employment Pass (EP) qualifying monthly salary for new applicants from Jan 1, 2025, and those who are renewing it from the year after.

Their minimum qualifying monthly salary will be upped to $5,600, from $5,000 currently.

Those working in financial services will need to earn $6,200 per month, up from $5,500 now, in view of the sector’s higher wage norms.

“The EP qualifying salary will also continue to increase progressively with age,” Minister for Manpower Tan See Leng said on March 4, during the debate on the Ministry of Manpower’s (MOM) budget.

The minimum salary for a candidate in their mid-40s to qualify will also increase to up to $10,700, and to up to $11,800 for those working in financial services.

The changes were made to ensure the cost of hiring an EP holder aligns with what the top one-third of local professional, manager, executive and technicians minimally earn, in a move unveiled during Budget 2022.

The EP qualifying salary is reviewed annually against the benchmark, MOM said in a statement on March 4.

The timing of the moves means that firms with existing EP holders have a longer runway, potentially up to 2028, to manage the impact of these changes and prepare their hiring plans, Dr Tan added.

The EP is valid for up to two years for first-time pass holders, and up to three years for those whose passes are renewed.

Dr Tan said the dates were set in response to concerns from various trade associations and chambers on the rising costs of manpower and constraints in hiring.

However, he added: “Even as we continue to attract top talent to grow our economy, our work pass framework needs to be strengthened to ensure that firms develop their local workforce and treat locals fairly.”

Still, there will be no adjustment to the S Pass qualifying salary and levy this year, which will both be increased in 2025 as part of a series of stepped increases already announced in Budget 2022, he noted.

Dr Tan also announced changes to the work permit framework for the marine shipyard sector set to kick in from Jan 1, 2026, to spur the sector’s pivot to more productive and resource-efficient activities.

The dependency ratio ceiling (DRC) for the sector will be gradually reduced from 77.8 per cent to 75 per cent.

The DRC is the maximum permissible ratio of foreign workers to the total workforce for a company in a given sector.

The change means that companies in the sector can hire a maximum of three work permit or S Pass holders for each local employee, down from 3.5 currently.

The levy for basic-skilled work permit holders in the sector will be increased from $400 to $500, and that of higher-skilled work permit holders, from $300 to $350.

Dr Tan spoke on the effectiveness of the Complementarity Assessment (Compass) framework as well.

Compass is a points-based framework that evaluates attributes of individual EP applicants and their prospective employer, in deciding to issue the pass.

All new EP applications made since Sept 1, 2023. have been evaluated through Compass, and the framework will be extended to renewals from Sept 1, 2024.

Under Compass, four “foundational” criteria are used to assess an application. They are an individual’s salary and qualifications, as well as the firm’s workforce diversity and support for local employment.

Bonus points are given to jobs where there is a lack of skilled workers specified on a Shortage Occupation List, and firms that partner the Government on ambitious innovation and internationalisation activities.

To pass the evaluation, which is designed to provide firms with greater clarity and certainty for manpower planning, the application needs to rack up 40 points.