Labour costs could soar by up to 20% in some sectors
Firms will feel pain of higher foreign worker levies and tight labour market
The double whammy of higher foreign worker levies and a manpower crunch could send labour costs in some sectors soaring by as much as 20 per cent this year.
The hit will come on July 1 when companies in the services, manufacturing and construction sectors face levy hikes of between $15 and $200 for each foreign worker on staff.
"The tighter labour market and the full force of levy measures are going to make it a pressuring environment for companies," said Mr Kurt Wee, president of the Association of Small and Medium Enterprises.
The pain will be felt particularly in the building game. Monthly levies will increase to a record $950 for each lower-skilled foreign worker hired by construction firms.
Four manpower policy changes
Higher salaries for Employment Pass (EP) applicants
FROM today, firms that want to hire foreign professionals on EP must pay them at least $3,300 a month, up from $3,000 before.
This applies to young foreign graduates. Older and more experienced applicants must earn even more to get an EP.
Employment Act changes
FROM April, rank-and- file workers earning up to $2,500 a month will be covered by the Act which spells out minimum employment standards.
Professionals, managers and executives earning up to $4,500 a month will be protected against unfair dismissal and for sick leave benefits. They were not protected before.
Higher foreign worker levies
FROM July, the monthly levies for foreign workers on work permits and S Passes will increase in the service, manufacturing, construction, process and marine sectors. The increases range from $15 to $200.
National jobs bank
FROM August, firms that want to hire foreign professionals must prove that they have tried to hire Singaporeans by advertising in the government-run jobs bank.
Firms with 25 or fewer staff, or those hiring for jobs paying $12,000 and above a month, will be exempted from the advertising rule.