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Singapore tightens rules for hiring foreigners

Singapore, August 16, 2011

Singapore's government, facing complaints from residents having to compete with foreigners for jobs, tightened rules on Tuesday for firms hiring overseas workers in mid-level positions.

The ruling People's Action Party (PAP) is under pressure to slow the rise in the number of foreigners seeking work in the rich city-state after May parliamentary elections that saw the opposition make historic gains.

Labour shortages mean the country has to rely on immigrant workers for many jobs. The unhappiness voiced by voters in the run-up to the elections included competition for jobs and places in schools.

Starting January next year, a foreigner must earn S$3,000 ($2,493) or more a month before he can qualify for an employment pass that will let him work in Singapore.     

Singapore in July raised the minimum qualifying salary to S$2,800 from S$2,500.

"Our aim is to avoid increasing dependence on foreign workers over the long term, by keeping the foreign share of the workforce at about one-third," the Ministry of Manpower said in a statement.

The changes will ensure that "as salaries of locals rise as they gain in experience and progress in their careers, they will not be disadvantaged by EP (employment pass) holders coming in at lower wages," the ministry added.

People who do not qualify for employment pass can continue to work in Singapore but their employers will be subject to various quotas and levies. The rules do not affect those who hold permanent residency status.

The ministry said it would give businesses time to make the necessary adjustments by phasing in the new requirements for existing staff over a one-to-two-year period.

Overall, about one-in-five existing employment pass holders will be affected by the changes. Economists say the hardest-hit sectors will be hotels and the offshore marine industry which hires large number of engineers from abroad.

Foreigners currently account for about 35 percent of the 5.1 million people in Singapore, which serves as a regional headquarters for many banks and multinational firms.

The Southeast Asian country is also a key centre for wealth management and commodities trading. The tighter requirements for mid-level staff, which had been flagged by Prime Minister Lee Hsien Loong over the weekend, has already sparked complaints by employer groups such as the Singapore International Chamber of Commerce and Singapore Business Federation. - Reuters




Tags: Singapore | Foreigners | hiring | residents |

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