Coronavirus: New MOM measures to help businesses, including SMEs, cope with outbreak

A woman wears a protective face mask at a bus stop in Bedok on March 24, 2020.
A woman wears a protective face mask at a bus stop in Bedok on March 24, 2020.ST PHOTO: LIM YAOHUI

SINGAPORE - New measures to help businesses cope with the coronavirus outbreak have been rolled out by the Ministry of Manpower (MOM).

In a statement on Tuesday (March 24) MOM said that, with immediate effect, small- and medium-sized enterprises (SMEs) will get a three-month extension for paying the levy for the foreign workers they hire. This is expected to give these companies more flexibility with managing their cash flows.

Another measure announced is an up to 90-day waiver on levies for foreign workers on overseas leave. This also takes effect immediately.

The last measure is a refund on the "man year entitlement" for foreign workers in construction firms.

Under the man-year entitlement framework, these firms can pay lower levies for a certain number of foreign workers, depending on the project. The lower levies are paid monthly for a year.

With the refund scheme, the lower levy for a foreign worker is not forfeited if the worker leaves, or is unable to work. Instead, the unused lower levy benefit can be used for another worker.

Companies can apply to the Building and Construction Authority for the refund scheme from April 1 for a period of six months.

MOM also urged firms with extra manpower to give priority to locals in keeping their jobs. These firms should also allow their foreign workers to be transferred to other firms facing a manpower shortage.

On the extension of the SME foreign worker levy payment, about 60,000 firms can benefit from this relief measure and it will apply to levies incurred in 2020.

SMEs will have up to five months to pay for the foreign worker levy from the month it is incurred. Currently, the foreign worker levy incurred is due by the 14th of the following month.

Employers who do not make the payment on time will have their new and renewal work pass applications rejected. If they cannot make payment on time for two consecutive months, all existing work passes under that employer will be revoked.

MOM urged companies that benefit from the extension to keep their existing workers and not employ new foreign workers. The ministry will not allow new applications of work passes from these firms, although it will accept renewals.

The late payment penalty of 2 per cent a month will still apply to levy payments which are extended.

For the 90-day levy waiver for foreign workers on overseas leave, this was extended due to tighter border restrictions and difficulties workers may face when returning to Singapore.

It applies to firms that send their foreign workers home from now until the end of this year.

The current levy waiver for up to 60 days applies to foreign workers who go on overseas home leave for at least seven consecutive days.

The refund scheme for construction companies that allows them to reallocate lower levies comes after feedback from the Singapore Contractors Association Limited that construction firms are facing disruptions due to delays in overseas supplies and travel restrictions on foreign construction workers.

As a result of these disruptions, construction firms are unable to fully utilise the year-long lower levies under the man-year entitlement framework.

This means higher costs to contractors who will have to hire foreign workers on higher levy rates.

But with the new refund scheme, companies can use the remaining unused lower levy benefits for new workers or existing ones.

Following the Ministry of Health's advisory against all travel abroad on March 18, MOM said it would be limiting the number of entry approvals for work pass holders to enter Singapore.

MOM said that a very small number of these work pass holders would be allowed to enter, with priority given to essential services like healthcare and transport.

With this, the ministry advised employers to defer plans to bring in new foreign workers from overseas until the coronavirus situation stabilises. If foreign workers are still needed, they should use foreign workers already in Singapore.

If the foreign workers are not needed, employers should allow them to be transferred to other employers who face a manpower shortage in the same sector.

Firms in manufacturing and services can approach the Singapore Business Federation (SBF) for assistance under the SBF ManpowerConnect scheme while construction firms can use the online Foreign Construction Worker Directory System to match workers with prospective employers.

More information on all the measures is available on the MOM website.