Singapore remains open to the world as a financial hub as it tightens the restrictions imposed on the foreign workers for protecting the local jobs amid the recovery process from the coronavirus pandemic. However, the new rules enforced for limiting the foreign worker visas will not affect the status of Singapore as a business hub according to the Trade & Industry Minister of the country. The city-state is still trying to get skilled workers and remains open to foreign talent.
Reasons behind the need for foreign employees
Most businesses operating in Singapore hire foreign talent for supplementing the local workforce. Reasons behind this are many such as declining birth rate, aging population, unprecedented economic growth, and non-availability of required local talent for the employers in certain sectors such as business, finance, IT, and Research and Development. There is a shortage of skilled local talent and so the businesses have to resort to hiring foreign manpower.
Certain job profiles such as domestic help and construction work help are not envisaged by the Singapore locals. This leaves no other alternative than getting foreign workers for many companies. The local government has liberalized its foreign policy for companies to hire in Singapore. Considering the country’s history of hiring professionals they have put into place sufficient provisions for hiring foreign help.
Employment Act and foreign employees
According to the employment act, foreigners are required to have a valid work visa to be eligible for work in Singapore. If you are looking to hire a foreign national you need to apply for a valid work permit or a work pass on the person’s behalf before this person can begin employment for you. Keep in mind that some work passes a ceiling or a restriction on the number of foreign nationals you can hire as a business. Three main groups categorize the foreign workforce.
- Skilled professionals including doctors, software engineers, R&D experts, etc. who are provided an employment pass.
- Semi-skilled professionals such as chefs, technicians, and administrative professionals get issued an S pass.
- Unskilled professionals such as domestic help and construction workers are issued with a work permit that is called an R pass.
Compliance requirements by the employer with the Employment Act and Foreign Manpower Act
The employment act of the state of Singapore sets minimum standards for various issues such as working hours, salaries, and retrenchment benefits. The foreign employees who are under a service contract with their employer are covered under the employment act except for:
- Domestic workers.
- Persons hired by the government statutory board.
For the employees working under these conditions, their employment issues are governed by the employment contract terms. The employers looking to hire foreign nationals and are governed by the employer act need to note that part 4 of the employment act applies to people working to earn a monthly salary less than $4500 and to the workmen making less than $2600 a month. This portion of the act provides for hours of work, rest days, annual leave, and other conditions of service. The EFMA or Employment of Foreign Manpower Act makes provisions for all foreign employees that are holding the work pass including the holders of employment pass and S pass. This act outlines the required obligations for hiring foreign employees.
Using PEO for foreign employee recruitment
For hiring foreign employees most medium and large-sized businesses prefer to combine with headhunters such as PEO to get the right candidate. This is a convenient approach as it requires less effort and time. Significantly, you check out the charges offered by various agencies for their services. Normally this is equivalent to the salary of the candidate. Something else that PEO companies offer is employee relocation services. You also need to check out the policies of the PEO (Professional Employer Organization) before you can finalize an agency. This is also needed if you are interested to learn more about employee relocation services that a global PEO offers.
Personalized employment pass
You can also hold a personalized employment pass as a candidate in Singapore. For continuing to hold this pass the foreign national should not have remained unemployed for more than 6 months at any particular time. They should be earning a fixed salary of more than $144,000 annually. During the period of employment, they should have notified the MOM if there are any changes in their situation, contact details, and salary. There is no quota or foreign worker levy on this kind of employment pass.