The minimum monthly qualifying salary for Employment Pass (EP) applicants will be raised from S$5,000 to S$5,600 on Jan. 1, 2025, Manpower Minister Tan See Leng said on Mar. 4 during the Committee of Supply debates.
For the financial services sector, which has "higher wage norms", the figure will be raised from S$5,600 per month to S$6,200.
In addition, the qualifying salary will also continue to increase progressively with age, up to S$10,700 for a candidate in their mid-40s.
In the case of EP pass application renewal, the revised qualifying salary levels will kick in on Jan. 1, 2026.
"So this means that firms with existing EP holders have a longer runway, potentially up to 2028 to manage the impact of these changes, and prepare and adjust accordingly their hiring plans," Tan said.
The last time the minimum qualifying salary was raised for EP holders was in 2022, from S$4,500 to S$5,000.
At that time, the minimum qualifying salary for Special Pass applicants was also raised.
According to the Ministry of Manpower (MOM), the EP qualifying salary is benchmarked to the top one-third of salaries for local professionals, managers, executives and technicians (PMETs).
Work pass framework will be strengthened to ensure that local workforce is treated fairly
In response to concerns about how the EP framework and Fair Consideration Framework will be strengthened to treat locals fairly and help them grow, Tan said this would be done "systemically" through the Complementarity Assessment Framework (COMPASS).
COMPASS is a points-based system for EP qualification and includes criteria for firms, such as support for local employment compared to its industry peers.
Firms with a lower local PMET share relative to their sector will therefore score fewer points on the firm-level criteria, making it harder to pass COMPASS.
"These are hence incentivised to improve their local PMET share," he said.
The Tripartite Alliance for Fair and Progressive Employment Practices (TAFEP) has been engaging and supporting firms that score poorly on the firm criteria under COMPASS to help them improve their workforce profile, Tan added, with more than 440 firms attending TAFEP's workshops in 2023.
Firms with unfair hiring practices will still be taken to task however, under the Tripartite Guidelines for Fair Employment Practices, and under the Workplace Fairness Legislation in the future.
Has the Shortage Occupation List under COMPASS been effective?
Tan also addressed concerns about the effectiveness of COMPASS' Shortage Occupation List (SOL) in easing skills shortages.
The SOL was designed to award bonus COMPASS points to EP applicants filling acute occupational shortages in areas of "strategic importance" for the economy.
Based on preliminary data from COMPASS' implementation in September 2023, the proportion of EP holders in occupations with a labour shortage has increased since COMPASS was implemented.
This shows that the list reflects real shortages in the industry, the minister highlighted.
20 per cent of the new EP holders in these roles also used the bonus points from the SOL to pass COMPASS.
"Therefore, the SOL is very helpful in ensuring that COMPASS does not hinder business growth because of a shortage of skills locally," Tan added.
Top photo by Damir Kopezhanov via Unsplash