Expat salary boost for new managers and executives in Singapore

Government to raise wages criteria by 9 per cent in bid to 'maintain quality of our foreign workforce', says ministry of manpower.

The central business district of Singapore. The government will raise the salary criteria for foreign workers from January 1. Edgar Su / Reuters

Singapore will raise the salary criteria for foreign managers and specialists that companies can hire starting next year, a move that may add to the competitive challenges faced by local firms amid slowing economic growth.

The qualifying monthly salary for employment passes (EP) will be raised by 9 per cent to S$3,600 (Dh9,733) from S$3,300 starting January 1, 2017, the ministry of manpower said on Tuesday.

Firms must apply for the passes when hiring foreigners in managerial, executive or specialised jobs.

“This change is part of the ministry of manpower’s regular updating of the EP qualifying salary to keep pace with rising local wages, maintain the quality of our foreign workforce and enhance their complementarity to the local workforce,” the ministry said, adding that it was the first such update since January 2014.

The change is likely aimed at preventing the salary criteria from becoming too low compared with rising wage levels seen in Singapore in the past few years, economists said.

The nominal median gross monthly income from work for full-time employed residents rose by 4.7 per cent year-on-year as of June 2015, after rising 1.8 per cent the previous year, according to official data.

The latest change could add to the cost burden that companies face, especially small and medium-sized enterprises (SMEs), said Francis Tan, an economist for UOB.

“A lot of SMEs that I have been talking to have been already complaining about the higher cost of labour over the past few years,” Mr Tan said.

“At a time whereby economic growth is still probably as slow as last year, this will translate to probably also quite smaller profit margins for firms going forward,” he added.

The ministry of manpower said firms will get to use the old criteria when renewing existing employment passes that expire by June 30, 2017.

Singapore has been making it harder for firms to hire foreign workers to reduce its dependence on low-cost overseas labour, as well as to address complaints by citizens concerned about overcrowding and increased competition for jobs.

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