Minimum pay to qualify for Employment Pass to rise

Foreign professionals will have to earn more in the near future to qualify for an Employment Pass (EP), a move business groups and experts say will hit hard those now coming here to work for a minimum salary of $3,000 a month.

Employers will prefer to hire Singaporeans for such positions, said human resource experts like Mr Josh Goh.

"I don't think they would increase the salaries of foreigners at that level in order to retain them," said Mr Goh, assistant director of corporate services at The GMP Group.

But this might not be the case for foreigners with specialised skills or in important leadership roles, said Singapore International Chamber of Commerce chief executive Phillip Overmyer.

Large multinationals are more likely to just pay more to retain such talent, he added.

Their comments follow Acting Manpower Minister Tan Chuan-Jin's remarks in a Business Times report published yesterday, that the minimum salary for all three tiers of EP will be changed.

The aim: to help local professionals, managers and executives (PMEs), who face competition from foreigners with lower pay demands.

Mr Tan said: "Should $3,000, for example, be the threshold where we admit in people on the Employment Pass? I think the numbers will go up… I don't think it should be $3,000." He was referring to the current minimum salary for the lowest Q1 tier.

For the higher-tier P1 and P2 passes, he said: "I think the levels would go up." The minimum pay for P1 is $8,000 and for P2, $4,500. Mr Tan, however, did not specify the size of the increase as the review of the EP framework has yet to be completed.

Mr Victor Tay, chief operating officer of the Singapore Business Federation, hopes "the increase will not be beyond the job scope and competence that businesses are paying for".

While acknowledging the need to ensure the quality of professionals coming here, Mr Tay prefers greater clarity on which sectors see more local PME unemployment and competition from foreigners, rather than a blanket raising of the minimum salaries.

But labour MP Patrick Tay, director of the National Trades Union Congress' PME unit, welcomed the move, as it would prevent more experienced foreign PMEs from undercutting locals.

Changes to the EP framework were first announced in the Budget statement in February.

Mr Tan raised the topic again in the Budget debate in March, saying he will "make further adjustments to the EP framework, especially to the Q1 segment later this year".

The move is to help level the playing field for junior to mid-level local PMEs, he had said then.

In The Business Times interview, the plight of junior PMEs came up when he said he was "not particularly happy" with how graduate starting salaries have fared in recent years. After taking inflation into account, the median starting pay of graduates was lower for recent cohorts compared with 2007, the first year such figures were available.

Mr Tan also touched on the topic of minimum wage, saying that although he was "not dogmatic" about it, the Government's preferred approach remains a combination of Workfare and a progressive wage system.

Workfare consists of the Workfare Income Supplement, which tops up the pay of low-wage workers, and the Workfare Training Support scheme, which encourages training. Both were strengthened in the latest Budget.

The progressive wage model sets out career ladders and pay benchmarks for low-wage sectors like cleaning.

Mr Tan also said his ministry will hold its own Our Singapore Conversation sessions in the coming months, to look at how the Government can help employers and workers prepare for the demands of the future economy.