Employment Pass Applications and Rejections on MyCareersFuture
7 May 2024
Ms Hazel Poa asked the Minister for Manpower in the last five years (a) what is the annual number of employment pass applications for jobs that are initially posted on the MyCareersFuture portal of the Government; and (b) how many employment pass applications are rejected as a result of employers deemed to have not giving due consideration to Singaporean applicants on MyCareersFuture.
Dr Tan See Leng: All Employment Pass (EP) applications are subject to the Fair Consideration Framework’s (FCF) job advertising requirements, unless exempted. The advertising requirements and exemptions are clearly stated on the Ministry of Manpower’s (MOM)’s website. Over the past five years, an average of 29,200 approved new EP applications were subject to the FCF job advertising requirements and were initially posted on MyCareersFuture.
MOM takes a serious view of discriminatory hiring practices. We have a robust set of checks to ensure that employers fairly consider all job applicants; in particular, local workers that apply through MyCareersFuture.
First, MOM’s systems block EP applications that do not meet the FCF job advertising requirements, such as the minimum advertising duration of 14 consecutive days on MyCareersFuture, from submission. For applications that indicate that they meet the FCF job advertising exemption criteria, MOM does further verification checks. Over the past five years, about 2% of all new EP applications were rejected for incorrectly indicating that they were exempted from the FCF job advertising requirements.
Second, MOM and the Tripartite Alliance for Fair and Progressive Employment Practices scrutinise EP applications proactively using data analytics to identify employers who may have pre-selected foreigners when hiring without adhering to the spirit of the FCF advertising requirements. In the past five years, over 600 EP applications were withdrawn or rejected following investigations. MOM may also impose sanctions on errant employers, including debarring them from hiring foreign workers for up to 24 months.
In addition to these measures, MOM takes every discrimination complaint seriously and will not hesitate to take action against errant employers to uphold fair employment practices.
Shared Stay-in Senior Care Services Sandbox
7 May 2024
Ms Hazel Poa asked the Minister for Manpower (a) what foreign manpower concessions are provided to participating companies under the Shared Stay-in Senior Care Services sandbox; (b) whether there are any other sandbox or pilot schemes in which foreign manpower concessions are given; and (c) if so, what are they.
Dr Tan See Leng: Foreign manpower flexibilities are provided to participating companies under the Shared Stay-in Senior Care Services sandbox to support the Ministry of Health and the Agency for Integrated Care in testing out alternative senior care options to meet the caregiving needs of seniors and their families. These flexibilities include additional foreign worker quota and source relaxations.
Besides the Shared Stay-in Senior Care Services sandbox, the Ministry of Manpower (MOM) also provides similar foreign manpower flexibilities to companies under the pilot Household Services Scheme (HSS) that provides part-time elder-minding and childminding services.
MOM will continue to work with sector agencies to calibrate the foreign manpower flexibilities accorded to areas serving important societal needs with limited scope for automation or localisation, while ensuring that we are not over-reliant on foreign workers.
PMET Employment among Different Age Groups
7 February 2024
Ms Hazel Poa asked the Minister for Manpower what are the reasons for (i) the decrease in PMET employment for those aged below 30 in 2022 compared to previous years and (ii) the significant increase in PMET employment for those in their 40s to 50s.
Dr Tan See Leng: Professionals, managers, executives and technicians (PMET) employment for those aged below 30 decreased from 222,000 in 2021 to 191,400 in 2022. This may be attributed to a higher share of young tertiary educated residents staying outside the labour force to pursue further education, leading to more youths entering the workforce at a later age.¹
PMET employment for those aged 40-59 increased from 620,100 in 2021 to 725,300 in 2022. The increase may be due to the tight labour market in 2022 as companies increased their workforce sizes in line with the post-pandemic economic recovery.
Note(s) to Question No(s) 27:
¹ The proportion of young tertiary educated residents who were outside of the labour force because of further studies rose from 12.8% in 2021, to 15.2% in 2022.
Failure to Give Retrenchment Notification to Government
5 February 2024
Ms Hazel Poa asked the Minister for Manpower regarding the recent layoffs by an e-commerce company which was not notified to the unions (a) whether the Ministry has data on the number of employees who were laid off with a breakdown by nationality; and (b) whether the Ministry will consider regulating non-compete clauses in employment contracts.
The Minister for Manpower (Dr Tan See Leng): Mr Speaker, Sir, may I have your permission to address six oral Parliamentary Questions (PQs) numbering Question Nos 32 to 37 for the 5 February 2024 Sitting. In addition, to provide a more holistic answer, I will also address four oral PQs scheduled for the Sitting on 6 February and four written PQs scheduled for Sittings today and on 7 February 2024, please.
Mr Speaker: Please go ahead.
Dr Tan See Leng: Members have filed these Parliamentary Questions (PQs) on various issues related to retrenchment and arising from a recent retrenchment exercise that has been in the news. I am taking these PQs collectively so as to provide a more comprehensive and holistic response.
I will begin by first addressing the Lazada Group’s retrenchment exercise conducted in January 2024. I believe that this was the e-commerce company referred to by Dr Tan Wu Meng, Ms Hazel Poa, Mr Yip Hon Weng and Mr Neil Parekh Nimil Rajnikant in their PQs.
First and foremost, I would like to assure Members that the Ministry of Manpower (MOM) has been actively involved in this matter to ensure that Lazada’s retrenchment is conducted in a fair and responsible manner. To recap, in early January this year, there were reports of sudden layoffs at Lazada Singapore Pte Ltd which is conducted without consultation with the union, which is the Food, Drinks and Allied Workers Union (FDAWU). If Lazada had correctly notified the FDAWU early, they would have been able to work together with the union to ensure that the retrenchment exercise was carried out fairly and responsibly, and proper support was given to the affected workers.
However, Lazada did not notify the FDAWU of the retrenchment exercise. This was not in line with the Tripartite Advisory on Managing Excess Manpower and Responsible Retrenchment (TAMEM). TAMEM sets out guidelines for employers on how to manage retrenchment exercises in a fair and responsible manner. MOM immediately stepped in to inform Lazada that their action was not aligned with TAMEM.
Through MOM’s intervention, Lazada apologised to the union and acknowledged that they should have notified them before informing employees. FDAWU accepted Lazada’s apology. In the past few weeks, MOM has been actively facilitating many rounds of negotiations between FDAWU and Lazada. This is to ensure a fair outcome for the affected employees and to ensure that such an incident does not occur again. As you may have heard in the news, MOM has managed to facilitate an amicable settlement between Lazada and FDAWU. FDAWU managed to secure an improved overall retrenchment package, with retrenchment benefits that are in line with industry standards. Lazada has also committed to working in closer partnership with FDAWU moving forward.
To Dr Tan Wu Meng’s question, Lazada had submitted the Mandatory Retrenchment Notifications (MRNs) for its January 2024 retrenchment exercise on time. This is within five working days after the employees were notified. Following the submission, the Taskforce for Responsible Retrenchment and Employment Facilitation worked with Lazada to provide the affected employees with career facilitation services and information kits on career resources. This taskforce comprises representatives from the MOM, Workforce Singapore (WSG), the National Trades Union Congress (NTUC), NTUC’s Employment and Employability Institute (e2i) and Enterprise Singapore (ESG).
To Ms Hazel Poa’s question about the number and nationality profile of the affected Lazada employees, MOM does not publicly provide such information about a company’s business operations. Nonetheless, we reiterate that employers must conduct retrenchment exercises based on objective selection criteria.
Mr Speaker and Members, Mr Yip Hon Weng asked about the lessons learnt from the Lazada incident. Dr Tan Wu Meng and Mr Neil Parekh also asked about steps to ensure that tripartism is maintained.
The Lazada incident clearly demonstrates the success of Singapore’s unique model of tripartism. While there was an initial lapse on Lazada’s part in not notifying the union on the retrenchment exercise which contravened the TAMEM, MOM actively stepped in and facilitated the discussions between Lazada and the FDAWU to help them arrive at an amicable and fair resolution that achieved win-win outcomes for the affected workers and the company. Lazada has also committed to working closely with FDAWU in the future.
The satisfactory resolution to this matter was possible because of tripartism. This is a model where unions, companies and Government work together in a collaborative spirit to find solutions and build even stronger partnerships. In many other countries, the unions and companies would have approached similar issues in, perhaps, a more confrontational manner. This would have resulted in more conflicts, with potentially acrimonious and longer-term negative implications for all of the parties involved.
However, in Singapore, this particular incident, was quite swiftly resolved. So, the ability to resolve such incidents attests to the high levels of trust amongst the tripartite partners.
This is also why unionised companies should always consult their unions when making decisions that fundamentally impact workers, such as retrenchments. Members of the House, retrenchment exercises impact all of our workers emotionally, psychologically and, of course, financially. Unions will have the expertise to ensure that the exercise is carried out fairly, responsibly and communicated in a sensitive manner to affected workers. This will help to smoothen the process for companies and enable the affected workers going through this difficult period to be better supported.
Beyond this specific incident, several Members have also asked about how we ensure that retrenchment exercises are conducted in a fair and responsible manner. Mr Yip Hon Weng asked whether MOM should mandate all companies with at least 10 workers to notify unions about upcoming lay-offs. Mr Christopher de Souza and Mr Louis Chua asked whether there should be penalties on companies who do not notify and consult unions about a retrenchment exercise and whether adequate compensation is made to employees. Mr Patrick Tay, Dr Tan Wu Meng, Mr Chua again and Mr Christopher de Souza asked about the measures to ensure responsible employment practices, compliance of companies with regard to MRN requirements and what actions can be taken against employers who are recalcitrant.
I will address these questions together and start with our overall approach towards retrenchment issues. Singapore’s approach has always been one that is balanced and one that protects workers, whilst giving businesses flexibility. Let me make three points in our approach.
Mr Speaker: Minister, you have two minutes, just to remind you.
Dr Tan See Leng: Yes. First, we engage and educate employers to act responsibly. I am going to try and jump forward quickly.
Secondly, employers are required to notify MOM within five days of the retrenchment exercise. I will publish the entire transcript on the Hansard so that Members can read through.
And third, we protect workers and we will not wait until retrenchment happens to do so. We also help workers to build career resilience, so that they can find new and better jobs when they face disruptions.
I want to record the point and address the point that whilst some amongst us have called for stronger action to protect workers, even without legally mandating the retrenchment benefits, our MRN data from 2019 to 2023 shows that around nine in 10 eligible employees received retrenchment benefits.
So, as I have alluded to on our approach, ensuring that while we protect the workers, we must continue to preserve the flexibility for businesses to adjust to market conditions because this will ultimately create and can sustain more good jobs for Singaporeans.
During this particular period, with regard to this issue, Mr Gan and many other Members, a few other Members of the House also asked about collective agreements (CAs), non-compete clauses and restricted stock units.
Suffice to say, whether or not a CA should be put in place, our approach has been to let the employer and the union decide. But any disagreements, including whether a CA should be put in place, can be raised to MOM for conciliation and the Industrial Arbitration Court (IAC) for arbitration if conciliation is unsuccessful.
For the rest of it, I would like to reassure Members of the House that whilst there have been a few high-profile retrenchments, Mr Neil Parekh has, in particular, asked about the Singapore job market over the next few months.
Our assessment is that while the economy is projected to improve in 2024, there are still downside risks in the global economy. What we are doing is to make sure that we continue to work with our tripartite partners to keep a close watch on the situation to continue to be ready to provide employment facilitation and to ensure that any retrenched worker will be treated fairly.
I want to end by exhorting all of our employers that retrenchment is a difficult phase that both employees and employers have to go through, especially when they are undergoing financial difficulties for companies or when they are restructuring their operations. However, it is even more difficult for our workers because it takes an emotional toll on them when it affects their livelihoods.
Our tripartite partners understood this and developed TAMEM to guide companies to carry out retrenchment exercises responsibly if retrenchment is ultimately unavoidable.
We will work closely and from the example of how the Lazada case was managed, the spirit of collaboration and tripartism in Singapore remains strong. We will continue to stand committed to work together to protect our workers’ interests and we will, at the same time, also do our best to ensure that Singapore continues to remain competitive to provide good jobs.
Mr Speaker: We have run out of time. Minister, just to let you know, Hansard is a verbatim record. So, you cannot add other things which you had intended to say. What I suggest is that you may want to address some of these in a separate way to Members or to the public; because indeed, it is a matter of public interest.
Matched Retirement Savings Scheme
9 January 2024
Ms Hazel Poa asked the Minister for Manpower (a) why does the Matched Retirement Savings Scheme not cover seniors aged above 70; and (b) whether there are any plans to extend the scheme to cover seniors above 70, especially those who are still working.
Dr Tan See Leng: As part of the retirement adequacy measures announced at the National Day Rally and in the Forward Singapore report, the Government will be enhancing the Matched Retirement Savings Scheme. Details will be announced at Budget 2024 and the Ministry of Manpower’s Committee of Supply debate.
Recommendations by Humanitarian Organization for Migration Economics
3 October 2023
Ms Hazel Poa asked the Minister for Manpower whether the Ministry will consider adopting the recent recommendations by the Humanitarian Organization for Migration Economics to (i) allow migrant domestic workers (MDWs) who are assisting in investigations or given stern warnings, to work (ii) provide live-out options for MDWs and (iii) allow MDWs to change employers with notice and, if not, why not.
Dr Tan See Leng: Migrant domestic workers (MDWs) who are assisting with investigations are generally allowed to work under the Temporary Job Scheme unless there are concerns over public safety or interference with investigations. Employers may request to continue hiring their MDWs who have been given stern warnings.
The Ministry of Manpower is not considering live-out options for MDWs as it will pose more difficulties for employers to maintain oversight of their MDWs’ well-being and safety. Households that require domestic help for only certain periods of the day can consider engaging the services of companies on the Household Services Scheme instead.
MDWs may terminate their employment at any time with notice, as provided for in the employment contract. Should they wish to transfer to another employer, they will require the consent of their current employer.
Average CPF Interest Rate
19 September 2023
Ms Hazel Poa asked the Minister for Manpower for each year in the past five years, what is the overall average CPF interest rate across the different types of CPF accounts and balances.
Dr Tan See Leng: The overall average CPF interest rate (including Extra Interest¹) across the different types of CPF accounts and balances from 2018 to 2022 has been close to 4% per annum.
Note(s) to Question No(s) 38:
¹ To help boost retirement savings, the Government pays extra interest of 1% on the first $60,000 of a member’s combined CPF balances, which is capped at $20,000 for the Ordinary Account. For members aged 55 and above, the Government pays extra interest of 2% per annum on the first $30,000 and 1% per annum on the next $30,000 of their combined CPF balances (capped at $20,000 for the OA).
Platform Workers in Workplace Fairness Legislation
19 September 2023
Ms Hazel Poa asked the Minister for Manpower whether there are plans to include platform workers in the workplace fairness legislation in future.
Dr Tan See Leng: Discrimination against platform workers by platform operators is a breach of the Tripartite Guidelines on Fair Employment Practices (TGFEP). The Tripartite Committee on Workplace Fairness in their final report has recommended to include additional guidelines in the TGFEP to make this existing position clearer. Platform workers who face such discrimination may approach the Tripartite Alliance for Fair Employment Practices for assistance.
The proposed workplace fairness legislation covers employment relationships. We will consider if platform workers could be included in the scope of the workplace fairness legislation in the future.
Shortage Occupation List
8 May 2023
Ms Hazel Poa asked the Minister for Manpower (a) what are the Ministry’s plans to mitigate any effect the Shortage Occupation List may have in entrenching Singapore’s reliance on foreign labour or depressing wages for Singaporeans in such occupations; and (b) for how many years does the Government expect these occupations to remain on the Shortage Occupation List.
Dr Tan See Leng: The Shortage Occupation List (SOL) is designed to complement efforts to develop the pipeline of local professionals. Enabling companies to access foreign professionals for shortage occupations allows these companies to grow their business and create new opportunities. Part of the criteria before an occupation is placed on the SOL is not just whether there is a shortage of such local workers, but also what plans there are by the industry and companies to train and place locals into these jobs.
As these occupations are facing shortages, salaries are competitive and will not depress wages for Singaporeans. In any case, foreign professionals filling SOL occupations will still need to meet the prevailing Employment Pass (EP) qualifying salary. The EP qualifying salary is benchmarked against the top one-third of local professionals, managers, executives and technicians.
SOL will be reviewed every three years. Occupations will be re-assessed based on whether the occupation remains in shortage at that point in time and whether commitments to develop the local pipeline have been achieved.
CPF Members with Outstanding Mortgage
8 May 2023
Ms Hazel Poa asked the Minister for Manpower (a) what is the current percentage of CPF members aged 55 and above with outstanding mortgage payments; and (b) what is the average mortgage amount per month, broken down by (i) those who do not meet the Basic Retirement Sum (BRS), (ii) those who do meet the BRS but not the Full Retirement Sum (FRS) and (iii) those who do meet the FRS respectively.
Ms Hazel Poa asked the Minister for Manpower for CPF members who (i) do not meet the Basic Retirement Sum (BRS), (ii) meet the BRS but not the Full Retirement Sum (FRS) and (iii) meet the FRS (a) what is the percentage of CPF members aged 63 and above with outstanding mortgage payments; and (b) what is the average monthly mortgage amount.
Dr Tan See Leng: As the average mortgage instalments may be skewed by a relatively small group of members with higher mortgage instalments, it may be more representative to look at the median instead.
Of members aged 55 and above who had not attained the cohort Basic Retirement Sum (BRS), 6.5% were using their Central Provident Fund (CPF) to service monthly mortgage instalments with median amount of $380 in CPF savings used for mortgage instalment. Of members aged 55 and above who had attained cohort BRS but set aside less than the cohort Full Retirement Sum (FRS), 10.5% were using their CPF to service monthly mortgage instalments with median amount of $700 in CPF savings used for mortgage instalment. Of members aged 55 and above who had set aside the cohort FRS or more, 7.4% were using their CPF to service monthly mortgage instalments with median amount of $1,000 in CPF savings used for mortgage instalment.
Of members aged 63 and above who had not attained the cohort BRS, 2.5% were using their CPF to service monthly mortgage instalments with median amount of $330 in CPF savings used for mortgage instalment. Of members aged 63 and above who had attained the cohort BRS but set aside less than the cohort FRS, 4.2% were using their CPF to service monthly mortgage instalments with median amount of $590 in CPF savings used for mortgage instalment. Of members aged 63 and above who had set aside the cohort FRS or more, 1.8% were using their CPF to service monthly mortgage instalments with median amount of $900 in CPF savings used for mortgage instalment.
Note(s) to Question No(s) 53-54:
¹ All data is accurate as of December 2022.
² The BRS provides members with lifelong payouts that cover a basic level of retirement expenses. Thus, attainment of the BRS is the relevant indicator for basic retirement adequacy. Those who prefer a higher payout can choose to set aside more CPF savings to the amount of the FRS instead of maintaining only the BRS in their Retirement Account if they own property.
Overseas Networks and Expertise Pass
12 September 2022
Ms Hazel Poa asked the Minister for Manpower what are some of the considerations for (i) not imposing a time limit requiring eligible Overseas Networks and Expertise Pass applicants to remain employed and (ii) allowing their spouses to work in Singapore on a Letter of Consent without having to meet other work pass requirements.
Ms Hazel Poa asked the Minister for Manpower (a) how many of the existing Employment Pass holders will meet the eligibility criteria for the Overseas Networks and Expertise (ONE) Pass; and (b) how many (i) Singapore Citizens and (ii) Permanent Residents are in direct competition with eligible ONE Pass holders for jobs respectively.
The Minister for Manpower (Dr Tan See Leng): Mr Speaker, may I have your permission to take oral Question Nos 1 to 18 in today’s Order Paper in my Ministerial Statement to be delivered later.
Mr Speaker: Please do.
5 October 2022
Ms Hazel Poa asked the Minister for Manpower (a) which agencies have provided feedback on the materiality of the letter of consent for spouses of Overseas Networks and Expertise Pass holders; and (b) when was the feedback given.
Dr Tan See Leng: The Ministry of Manpower (MOM) and economic agencies received feedback from a number of trade associations and chambers including the Singapore International Chamber of Commerce, and the American, British, European and French Chambers of Commerce. The feedback stated that having the Letter of Consent provided assurance to foreign professionals that their spouses would be able to work in Singapore and this was critical to their relocation decision.
The feedback was given following the announcement in March 2021 during MOM’s Committee of Supply debate on the regularisation of work arrangements of Dependant’s Pass holders.
7 November 2022
Ms Hazel Poa asked the Minister for Manpower whether feedback has been sought from trade associations and chambers of commerce on the Overseas Networks and Expertise Pass and, if so, when.
Dr Tan See Leng: MOM, MTI and economic agencies have regular engagements with Trade Associations and Chambers to seek feedback on the manpower needs of the business community and the work pass framework. Their feedback is consistently taken into account for all reviews of our work pass framework, including the Overseas Networks & Expertise Pass.
Singaporean Postgraduates and Their Median Salaries
20 October 2022
Ms Hazel Poa asked the Minister for Manpower (a) how many Singaporean postgraduates are there in our workforce; and (b) what are the median salaries earned by Singapore postgraduates according to (i) specialty and (ii) industry respectively.
Dr Tan See Leng: There were about 227,000 resident postgraduates in our workforce in 2021. The median gross monthly incomes of resident postgraduates vary across specialties and industries.
Among the top five most common fields of study that resident postgraduates specialise in, the median gross monthly incomes for full-time employed resident postgraduates range from around $8,500 for those with humanities and social sciences postgraduate degrees to around $11,300 for those with business and administration postgraduate degrees.
Among the top five most common industries that resident postgraduates work in, the median gross monthly incomes for full-time employed resident postgraduates range from around $9,400 for those in the health and social services sector to around $15,300 for those in the financial and insurance services sector.
Complaints of Ageism in Workplace
4 October 2022
Ms Hazel Poa asked the Minister for Manpower whether ageism in the workplace is increasingly becoming a problem.
Dr Tan See Leng: Senior workers are, and will, continue to be an important part of our workforce, especially as our workforce ages. Employers recognise this. The employment rate of residents aged 55 to 64 has increased from 67.1% in 2017 to 69% in 2021. For those aged 65 to 69, it has increased from 41.7% to 49%. This is comparable to the average of the top three Organisation for Economic Co-operation and Development (OECD) countries. Our re-employment rate also remained high, with most employees continuing to work in the same job without any cuts to basic wage and benefits.
The incidence of age discrimination has also fallen. Based on the Ministry of Manpower (MOM)’s Fair Employment Practices survey, the proportion of resident job applicants who experienced age discrimination during job search fell from 30.4% in 2018 to 18.9% in 2021. The proportion of resident employees who experienced discrimination during employment due to age is also relatively low, at 4.6% in 2021.
Nonetheless, we are mindful that we must continue to work with our tripartite partners to tackle the issue of age-related discrimination. The Tripartite Alliance for Fair and Progressive Practices (TAFEP) undertakes various efforts to educate employers and promote fair employment practices, so as to cultivate the right workplace norms and values.
In addition, the Tripartite Guidelines on Fair Employment Practices (TGFEP), requires employers to treat all employees and jobseekers, fairly and objectively. We take enforcement action against employers with discriminatory practices. Looking ahead, we will be enacting workplace fairness legislation. This will send a signal that there is no place for discrimination at the workplace. The legislation will broaden the range of measures and penalties available to address workplace discrimination, including age discrimination.
CPF Contributions for Platform Workers
4 October 2022
Ms Hazel Poa asked the Minister for Manpower whether he can provide an update on the study into making CPF contributions mandatory for platform workers.
Dr Tan See Leng: The Advisory Committee on Platform Workers has been engaging extensively over the past months with platform workers and companies on strengthening protection, including mandatory Central Provident Fund (CPF) contributions for platform workers.
While more than half of platform workers who responded to our public consultation on CPF contributions felt that mandatory contributions are important for their retirement and housing needs, we note that some of them are concerned about the impact on take-home earnings. Although platform companies recognise the importance for platform workers to build up their CPF for retirement and housing needs, the companies have raised concerns that such a move will result in increase in business cost.
Given the complexity of this issue, it is important for the Committee to discuss any proposal thoroughly with both workers and companies. The Committee remains on course to complete its work by the end of this year.
Minimum Requirements For Five-Year Employment Pass
4 October 2022
Ms Hazel Poa asked the Minister for Manpower whether there will be any minimum experience requirements or minimum educational qualification requirements imposed on experienced tech professionals who are applying for the five-year Employment Pass.
Dr Tan See Leng: We are still reviewing the occupations that will be eligible for the five-year Employment Pass (EP). There will be a salary requirement, as well as specific occupation-based checks, to ensure that candidates are suitably experienced and qualified for their respective roles.
All candidates must earn a monthly salary of at least $10,500¹ to proxy for professionals with mid-level experience. Similar to EP applications that rely on the Shortage Occupation List bonus to pass the Complementarity Assessment Framework (COMPASS), the Ministry of Manpower (MOM) will also conduct verification checks to ensure that the applicants have the specialised skills required to perform the stated role, which includes requesting for relevant qualifications.
Note(s) to Question No(s) 30:
¹ For candidates aged 36 and above, the salary required increases with age, up to $13,500 at age 45 and beyond.
Efforts to Groom Local Talent Pipeline
3 October 2022
Ms Hazel Poa asked the Minister for Manpower whether the Ministry has any plans to impose personal responsibility on human resource professionals in Singapore to comply with all manpower rules and regulations, such as the Fair Consideration Framework and Complementarity Assessment Framework.
The Minister for Manpower (Dr Tan See Leng): Mr Speaker, Sir. May I have your permission to take Question Nos 1 to 8 in today’s Order Paper together?
Mr Speaker: Yes, please.
Dr Tan See Leng: Members of the House, I delivered a Ministerial Statement last month on “Strengthening Singapore’s Position as a Global Hub for Talent”. In the Statement, I outlined how we intend to strengthen Singapore’s position as a global hub for talent and addressed questions around the enhancement of our work pass framework, including the introduction of the Overseas Networks & Expertise (ONE) Pass.
Members have subsequently filed a number of Parliamentary Questions on three related issues. First, on how we ensure a complementary foreign workforce. Second, on our concurrent efforts to develop our local talent pipeline. And last but not least, on our efforts to safeguard fair consideration. I am taking them together, so that we can address the issues more holistically. I will address questions which are more technical in nature on specific policies separately.
First and foremost, ensuring a complementary foreign workforce. Members in this House generally acknowledge the need to attract top talent, as per the intent of the ONE Pass. Some Members have, however, raised questions on our broader foreign workforce policy.
At the Employment Pass (EP) level, we focus on ensuring that the EP holders are of good quality. And we do not impose quotas. To answer Mr Gerald Giam’s question on whether there are plans to review the EP framework to introduce a quota for the bottom half of income earners among EP holders, we have explained our rationale before – doing so will restrict our ability to compete and hold our companies back.
Our emphasis on quality was reinforced when the Ministry of Manpower (MOM) announced significant adjustments to our EP framework at this year’s Committee of Supply debate. First, to benchmark the EP qualifying salary to the top one-third of our local Professionals, Managers, Executives and Technicians (PMETs) workforce. And second, to introduce a new points-based Complementarity Assessment Framework (COMPASS) from 1 September 2023 to holistically evaluate EP applications for complementarity. Companies whose candidates cannot meet the EP qualifying salary or pass COMPASS will have to apply for an S Pass instead, where they will be subject to a quota.
This is a neater solution than what Mr Giam is suggesting. Compared to his suggestion where some EP holders are subjected to a quota while others are not, our current approach has the merit of keeping the positioning and criteria of each pass type clear, and overall work pass framework simpler for businesses.
Being open and connected and bringing in complementary global talent have helped to grow the overall pie for Singapore and more good job opportunities for locals.
Ms Jessica Tan asked if there is data to show that Singaporeans are succeeding in getting quality jobs in key sectors. At the same time, Mr Liang Eng Hwa asked about the number of EP holders in the Information and Communications sector, compared to other sectors.
The Information and Communications sector has been a fast-growing one and is a sector that is facing talent shortages worldwide. In Singapore and elsewhere, employers have had to tap into the global marketplace for skills in shortages. In 2021, the ICT sector accounts for one-fifth of our EP stock. This has increased from one-sixth in 2016, thus reflecting the growing digital needs of our economy. The growth of the Information and Communications sector has also resulted in creation of more jobs for our locals – in the same timeframe, we saw strong growth in the number of local PMETs by 34,400. Median local wages in the sector also continue to increase. Therefore, we can see quite clearly that it is not a zero-sum game.
At the macro level, the data is also encouraging. There are more locals in higher-skilled PMET jobs. The proportion of resident workers in PMET jobs increased from 55% in 2016 to 62% in 2021. Across the board, local workers have experienced sustained wage growth. The median income of full-time employed residents has grown from $4,100 to $4,700 over the same period, an increase of 2.1% per annum in real terms. We have also seen improved job quality and better wages at the lower end, with the income of full-time employed residents at the 20th percentile increasing 2.7% per annum in real terms over the same period.
Mr Leong Mun Wai also filed a question in a subsequent Sitting specifically on local postgraduates, a group that is very likely to be taking up or even creating these high-quality roles. Their average unemployment rate has remained lower than that of all locals over the past five years.
We have managed to create good employment outcomes because we continue to be an attractive place for companies to do business. By combining and complementing local and foreign expertise, we can attract more investments and create many more good job and career choices for Singaporeans. Conversely, if companies do not have access to the complementary foreign manpower that they need, they may exit Singapore and take the jobs they create for Singaporeans with them. When it comes to foreign workforce policies, the way to advance is to strike a very careful and delicate balance.
Next, on developing our local talent pool and workforce. Local talent development already happens organically in tandem with economic growth. As businesses expand their investments here, they will need to find manpower to fill various roles and invest in training and upgrading their workers. By working in leading firms and alongside global talent, our local workers will also gain exposure to new ideas and best practices from around the world.
The Government and tripartite partners help to catalyse this process. We work with industry stakeholders to chart out transformation plans across 23 sectors through the Industry Transformation Maps (ITMs), which include strategies to prepare our workers for higher value-added jobs in each sector.
We have also put in place a whole eco-system of programmes and schemes which businesses can tap on to prepare their workers for jobs of the future. For instance, we recommend that companies work with NTUC to set up Company Training Committees (CTCs) to help drive business transformation and training plans – the Government has set aside a $70 million budget for the NTUC CTC grant. Employers can also tap on subsidised industry-relevant training courses and reskilling programmes for mid-career workers. This includes Workforce Singapore (WSG)’s Career Conversion Programmes (CCPs).
Ms Mariam Jaafar¹ filed a question for a later Sitting on how work experience and other certifications are considered aside from formal academic qualifications in eligibility requirements for CCPs. For some CCPs, academic requirements are put in place to ensure that the trainee is able to cope with the training, particularly where the training is very technical in nature. Applicants who do not meet the academic requirements may still be accepted into the programme if they have relevant alternative qualifications or work experience.
Ms Jessica Tan also asked about our initiatives to bring back top overseas Singaporean talent. Overseas Singaporeans, who have developed the ability to thrive in a global environment or who have gained industry-relevant experience and built extensive networks, can make significant contributions to our economy and pass on their knowledge to other Singaporean talent.
Fundamentally, strengthening Singapore’s position as a global hub for talent which is brimming with exciting opportunities is self-reinforcing – it will help to bring back overseas Singaporeans who are keen to contribute and to be a part of this ecosystem. The Government actively engages overseas Singaporeans to keep them connected to home, so that they can make an informed decision about whether and when to return to Singapore.
The Singapore Global Network (SGN) within the Economic Development Board (EDB) plays a key role in broadening and deepening our overseas Singaporean network through digital engagement, as well as partnerships with private, public and community organisations to deliver engagement initiatives, such as networking and community events. These engagements also allow overseas Singaporeans to serve as our valuable connectors and ambassadors in overseas markets, helping to spread Singapore’s good reputation.
For returning Singaporeans, SGN and other agencies offer a variety of online resources to facilitate a smooth transition, including information on education, working and living, as well as relocating back home to Singapore. For example, the Ministry of Education (MOE)’s website contains information about school admissions for returning Singaporean children.
Lastly, on fair consideration. There is no place for discrimination in Singapore. MOM does not and will not tolerate unfair hiring practices and employers who do not give locals a fair chance will face stiff penalties. The Fair Consideration Framework (FCF) sets out requirements for all employers to consider local workers fairly for job opportunities. Work is now underway to enshrine this in legislation.
Mr Yip Hon Weng asked about the number of companies placed on the FCF watchlist. Firms are placed on the FCF watchlist if they have an exceptionally high share of foreign PMETs compared to their industry peers, or a high concentration of a single foreign nationality source.
But, Members of the House, let me reiterate this. Firms placed on the FCF watchlist have not flouted any rules. Instead, what the Tripartite Alliance for Fair and Progressive Employment Practices (TAFEP) does is to engage these companies to help them improve their workforce profiles. Since 2016, MOM has engaged a total of more than 1,700 employers under FCF.
One other limb of FCF is the job advertising requirement. Employers must first advertise on MyCareersFuture (MCF) and fairly consider all candidates, before submitting an EP or S Pass application. Mr Louis Chua asked whether companies need to notify MOM on the outcome of a job posting when it is subsequently delisted or when the role is filled. We do not require companies to do so, just like how they also do not need to do so for other job portals. We are conscious of the fact that we should not add administrative burden and make it onerous for employers to use MCF.
While the number of cases of discriminatory practices is small, MOM will continue to remain vigilant. Besides investigating complaints lodged with TAFEP, we will also use data analytics to identify suspicious cases for further investigation. And where employers are found to be discriminatory, MOM will not hesitate to take action against such employers.
In response to Mr Louis Chua and Mr Yip Hon Weng’s questions, from 2017 to 2021, MOM took enforcement actions against approximately 300 companies. The regulatory actions included issuance of warning and being barred from hiring or renewing foreign workers.
Ms Hazel Poa also asked whether MOM intends to impose personal responsibility on human resource (HR) professionals in Singapore to comply with all manpower rules and regulations. I would like to remind Ms Poa that hiring decisions are not made by HR professionals alone. Senior management as well as line managers are also involved in these hiring decisions.
Today, MOM can take action against culpable individuals and decision-makers for non-compliance of MOM’s rules and regulations. This includes HR professionals as well as business leaders. Employers, business leaders and HR professionals all play an important role in ensuring that their companies’ employment practices are fair and that they comply with regulations and the Tripartite Guidelines. All employers in Singapore must comply with not just the letter but with the spirit of our laws and regulations on fair hiring, and adopt good HR practices.
The responsibility placed on employers as well as decision makers to uphold workplace fairness is also being discussed by the Tripartite Committee, which is deliberating the scope and design of workplace fairness legislation. Beyond enforcement, we must also enable and equip HR professionals to better support their companies.
Mr Speaker, Sir, in summary, we have a three-pronged strategy to support good employment outcomes: first, to safeguard the complementarity of our foreign workforce; second, to invest in developing our local workforce; and third, to ensure fair consideration for locals.
All our Government policies, all of our schemes as well as programmes, work together to achieve one goal – to create opportunities for locals, at all and every level of the workforce. I thank Members for their questions and I assure them that MOM will continue to update our suite of policies regularly and in line with this objective.
Mr Speaker: Ms Hazal Poa.
Ms Hazel Poa (Non-Constituency Member): I thank the Minister for his reply. The Minister mentioned earlier that they can already take action on individuals for non-compliance. Can the Minister elaborate on what kind of actions can be taken on these individuals? And which legislation is this power conferred under?
Dr Tan See Leng: I thank Ms Poa for her question. Today, MOM works very closely with the Institute for HR Professionals (IHRP), as well as our tripartite partners and employees to professionalise the HR workforce and to strengthen HR practices and capabilities.
One key effort is the IHRP certification, which recognises the level of skills and experience of HR professionals. Incumbent within the process certification, it assesses the knowledge and the understanding of our employment legislation and regulations, including FCF well as the soon to be implemented COMPASS.
I do not want to go too much into the details of that training. All certified HR professionals must comply with the IHRP’s code of professional conduct. If the HR professional has been found to have breached manpower rules and regulations, IHRP may subject the HR professional to corrective actions, such as counselling by senior certified professionals. They can also suspend the certification or permanently bar the individual from being certified, depending on the severity of the breach.
In addition, MOM can also prosecute errant employers or key personnel who make false declarations that they have considered all candidates fairly. Employers who are convicted of false declaration under the Employment of Foreign Manpower Act will face imprisonment of up to two years or fine of up to $20,000, or both.
Note(s) to Question No(s) 1-8:
¹ To ask the Minister for Manpower how are work experience, courses attended and certifications considered aside from formal academic qualifications in the eligibility requirements for career conversion programmes.
Real Wage Growth by Age Group
1 August 2022
Ms Hazel Poa asked the Minister for Manpower (a) whether the Ministry collects data on real wage growth based on different age groups; and (b) if so, what is the real wage increase for each year from 2000 to 2021 for those aged (i) 29 and below (ii) 30 to 39 (iii) 40 to 49 (iv) 50 to 59 and (v) 60 and above respectively.
Dr Tan See Leng: The Ministry of Manpower (MOM) publishes the median gross monthly income from work in our annual reports on the Labour Force in Singapore. It is sensible to examine the trend of wage growth over a longer period of time, instead of annually, as the annual numbers are sometimes subjected to wider fluctuations.
The real annualised change in median gross monthly income from work (including employer CPF contributions) of full-time employed residents by age is provided in Table 1.
Minimum Salary Requirements for Work Passes
4 July 2022
Ms Hazel Poa asked the Minister for Manpower (a) whether companies are allowed to increase the working hours for foreign employees in order to meet the new minimum salary requirements for work passes, and reducing the working hours of local employees to counter the higher wage cost; (b) whether this is the intended consequence of raising the minimum salary requirements for work passes; and (c) if not, what can the Ministry do to prevent this.
Dr Tan See Leng: Companies should not increase the working hours for foreign employees in order to meet the new minimum salary requirements for work passes, and reduce the working hours and thus wages of local employees to counter the higher total wage cost.
Such behaviour is absolutely not the intended outcome of MOM’s updates to the qualifying salary. The updates to the qualifying salary are to ensure that EP and S Pass holders are not hired simply because they are cheaper than locals, but because they bring in skills, networks and expertise that complement our local workforce. The result is to strengthen the complementarity of our foreign workforce.
Thus far, we have not come across any such cases as described by the Member, where EP or S Pass holders were forced to put in more hours with a corresponding reduction in work hours for local workers when updates to qualifying salary were made. And if we look at the historical data, local wages have continued to grow, including in years when EP and S Pass qualifying salaries were raised.
Fundamentally, it does not make good business sense to unfairly reduce locals’ working hours and salary. Employees who are unfairly treated will leave the company. Besides losing talent, the company may also find that it does not have enough quota to retain its S Pass holders at the next renewal. The vast majority of our employers understand that when it comes to setting wages, what matters are the job scope, responsibilities and performance of the worker, rather than the hours worked. This is particularly so for the professionals, managers, executives and technicians, or PMET, job roles that we are talking about here.
Nevertheless, if an employer engages in such unfair practices, as I stated in MOM’s Committee of Supply this year, the workers can take their grievances to the Tripartite Alliance for Fair and Progressive Employment Practices (TAFEP). TAFEP will engage the firm to conduct a proper salary review, because unfair remuneration practices run counter to the Tripartite Guidelines for Fair Employment Practices.
Monthly CPF Payout
11 January 2022
Ms Hazel Poa asked the Minister for Manpower what is the number of Singapore Citizens drawing a monthly CPF payout of (i) below $500 (ii) $500 to under $1,000 (iii) $1,000 to under $1,500 (iv) $1,500 to under $2,000 and (v) $2,000 and above, respectively.
Ms Hazel Poa asked the Minister for Manpower what is the projected number of Singapore Citizens in 10 years’ time drawing a monthly CPF payout of (i) below $500 (ii) $500 to under $1,000 (iii) $1,000 to under $1,500 (iv) $1,500 to under $2,000 (v) $2,000 to under $3,000 and (vi) $3,000 and above, respectively.
Dr Tan See Leng: The monthly CPF payouts that Singapore Citizens are receiving have been increasing over generations, given income growth, increased labour force participation, and improvements to the CPF system.
Older cohorts also tend to have lower monthly CPF payouts due to more liberal withdrawal rules at age 55. For example, older cohorts who withdrew 50% of their Ordinary and Special Accounts (OSA) savings from age 55 would see their payouts reduce by around half. About 25% of those aged 89 and above¹ and receiving CPF payouts in 2020 had monthly payouts above $500. This increased across cohorts to about 40% for those aged 67 to 88², and to about 60% for those aged 65 to 66.³
It is difficult to project CPF monthly payouts 10 years from now with meaningful accuracy as members’ CPF balances could change significantly during this period due to multiple reasons, such as contributions from employment income or voluntary top-ups.
Nevertheless, we can get an indication by looking at the CPF balances of the cohort that turned 55 in 2020 and their estimated CPF payouts when they reach age 65.
About 66% of active members would have accumulated sufficient CPF savings by 55 to set aside their cohort’s Basic Retirement Sum and can receive at least around $800⁴ in monthly payouts for life. Of these, about seven in 10 can expect to receive around $1,600 in monthly payouts, as they would have been able to set aside their cohort’s Full Retirement Sum. In addition, about 10% are expected to accrue additional contributions through employment to also receive at least around $800 in monthly payouts by age 65. The other members are likely to have had low total lifetime CPF contributions which means they could be eligible for the Silver Support Scheme⁵ if they do not have significant means to provide for their retirement.
The Silver Support Scheme, which covers a third of all seniors aged 65 and above, provides quarterly cash supplements of up to $900 in addition to their CPF payouts and other forms of Government support such as the Workfare Income Supplement, GST Voucher Scheme and ComCare. Many seniors also receive additional retirement support from their loved ones, from their private savings and by unlocking the value of their housing assets through the Lease Buyback Scheme or Silver Housing Bonus.
Note(s) to Question No(s) 36-37:
¹ These members could withdraw all of their OSA savings upon turning age 55.
² These members could withdraw 50% of their OSA savings upon turning age 55.
³ These members could withdraw 30% – 40% of their OSA savings upon turning age 55.
⁴ Based on a 55 year old male in 2020 who starts his payout at 65 years old, on the CPF LIFE Standard Plan.
⁵ Subject to additional eligibility requirements such as per capita household income and property ownership at the time of assessment.
Progressive Wage Model
14 September 2021
Ms Hazel Poa asked the Minister for Manpower how many Singaporean employees currently earning under $1,400 per month will not be covered by the changes to the Local Qualifying Salary requirement for companies.
The Senior Minister of State for Manpower (Mr Zaqy Mohamad) (for the Minister of Manpower): Mr Speaker, with your permission, I would like to take Question Nos 28 to 41 together, as well as another related Parliamentary Question by Member Yip Hon Weng¹ scheduled for a Sitting from tomorrow.
Mr Speaker: Please do.
Mr Zaqy Mohamad: I thank Members for their interest in the recent recommendations of the Tripartite Workgroup on Lower-Wage Workers which the Government has accepted. Apart from my reply today, I would also like to encourage them to read the 88-page report of the Workgroup where the reasoning and intent of many of the proposals are laid out in greater detail.
The Workgroup’s vision is for a strengthened social compact where everyone enjoys Singapore’s fruits of growth. We want to enable our lower-wage workers to progress along with other workers. At the same time, society, employers and the Government stand in solidarity with them. We must also recognise that, for our lower-wage workers’ progress to be sustainable, Singapore must maintain a dynamic economy, where businesses can thrive and create good jobs and good careers for our workers.
Uplifting lower-wage workers has been a priority for the Government over the years. Workfare is the foundation of the Government’s support for our lower-wage workers. We currently spend about $850 million a year on Workfare. The Prime Minister has announced that Workfare spending is expected to increase to $1.1 billion by 2023. This is a clear commitment that Workfare will continue to be a foundation of our policy response. The Government will release more details next year.
Mr Speaker, building on the foundation of Workfare, the Progressive Wage Model (PWM) provides job and training progression pathways for our lower-wage workers and grows their wages as they improve their skills and productivity. Workfare and Progressive Wages work in tandem and are, therefore, mutually reinforcing.
Over the last decade, our policies to support lower-wage workers have made a difference in uplifting them to enjoy good wage growth. From 2009 to 2019, real income at the 20th percentile of our resident workforce grew 39% cumulatively, faster than the median worker at 33%. To address Ms Ng Ling Ling’s and Mr Desmond Choo’s questions, I want to stress that these are real income gains; in other words, 39% cumulative income gains, even after subtracting the effects of inflation.
Low-income households would, therefore, benefit from our Progressive Wage and Workfare policies. I am sure many Members are aware that there are dedicated efforts to support our low-income households through various schemes, such as subsidies in education, healthcare, housing, as well as financial assistance. Households facing financial difficulties can approach MSF’s Social Service Offices (SSOs), which will look into ways to support them through schemes, such as ComCare assistance. MSF regularly reviews ComCare to ensure that support remains adequate.
The Workgroup achieved tripartite consensus on 18 recommendations, including significantly widening the coverage of Progressive Wages.
First, we will expand Progressive Wages to new sectors like Food Services, Retail and Waste Management, as well as occupations like Administrators and Drivers. We will also extend PWMs to in-house cleaners, security officers as well as landscape workers.
Second, we will introduce a new Local Qualifying Salary (LQS) requirement where employers will need to pay all its local workers at least the LQS, in order to access any foreign worker.
Third, we will introduce the Progressive Wage Mark, or PW Mark, to encourage firms that pay progressive wages.
The Workgroup has not deviated from the broad principle that wages should grow in tandem with productivity over the long term, so as to be sustainable. However, it recognised that there was a case for wage growth of lower-wage workers to outpace productivity. This is because the productivity of frontline workers is not due solely to the industriousness of the worker, but it is also dependent on the firm’s operations and methods of work. The Workgroup also recommended that for the next decade, the wages of our lower-wage workers should continue to grow faster than the median, or what we call the “median-plus” approach. However, when wages at the 20th percentile have gained sufficiently on median wage levels, this would no longer be necessary. We can reflect on other strategies beyond that.
Mr Edward Chia and Mr Sharael Taha asked about the sustainability of these wage increases. These are very important questions. One important way we will do this is to continue the Progressive Wage approach, whereby wage increases are secured by tripartite consensus, that is, the agreement between the employers and the unions remain very important.
These will be done by sectoral Tripartite Clusters for the Sectoral Progressive Wages, and the National Wages Council for the Occupational Progressive Wages. I know for a fact, and especially during these times, that tripartite negotiations are never easy, and for good reason, as the concerns of different parties, of the employers and workers, need to be balanced.
Tripartism is our strength, and some say our secret sauce, to make Progressive Wages work for the foreseeable future. I am confident that through such robust discussions, these established tripartite bodies will arrive at common ground that is sustainable and benefits all stakeholders.
If wage growth of our lower-wage workers outpace productivity growth in the medium term, the sustainable response is for businesses to use this period to urgently enhance their firm-level productivity to better support wage increases for our workers. To Mr Sharael Taha’s query, the Government will continue to support firms through the Productivity Solutions Grant, as well as more specific efforts enabled by the Industry Transformation Maps.
For many years, firms hiring foreign workers have been required to pay at least the LQS to the local workers that they need to count towards their foreign worker quota, or Dependency Ratio Ceiling (DRC). This is a policy that our businesses are already familiar with. The Workgroup studied this carefully and decided to leverage on the LQS to broaden our coverage of Progressive Wages. From September next year, firms hiring foreign workers will have to pay all local workers the LQS. This builds upon regular increases in the LQS level over the years, such as from $1,000 in 2016 to $1,400 in 2020.
To Ms He Ting Ru’s query, there are 103,000 full-time resident employees earning a gross monthly income of below $1,400 in 2020, which is about 5.3% of the full-time employed resident workforce. But I would also like to take the opportunity to highlight that in 2020, many of our lower-wage workers were also impacted by the economic impact of COVID-19 and faced reduced work-hours and allowances. These employees work in a wide range of industries, from Food Services to Administrative and Support Services, and occupy a diverse range of jobs, from cleaners to office clerks to shop sales assistants, and we can imagine the impact of COVID-19 on these jobs in the last year or year plus. This was also why the Government provided special support of $3,000 to this segment of workers through the Workfare Special Payment and other social support schemes.
With the new LQS requirement, an estimated 77% of these employees should see their wages rise to at least $1,400 a month. Many in this group would also see their wages further uplifted beyond LQS, by the Sectoral and Occupational Progressive Wages. The Workgroup expects the PWMs to continue to set the pace on wage growth, with Progressive Wage levels expected to rise beyond the LQS. For example, workers in the Cleaning and Landscape sectors can potentially earn at least about $2,400 a month by 2028.
To Ms Hazel Poa’s query, the remaining 23%, who are not covered, would be in businesses that do not hire foreign workers. The vast majority of these businesses are very small, hiring fewer than 10 workers and include small family operations, such as hawker stalls and heartland shops. We are all familiar with these microbusinesses; they are familiar faces in our neighbourhoods and typically having family members who are spouses, children or relatives helping out. They do not have the business scale or reach, and we are mindful that sudden wage shifts to these microbusinesses can result in business failure. So, the last thing we want is for job losses for these family businesses.
While not formally covered by the LQS requirement, these workers here should still see meaningful increases in their wages over time due to market forces. The Progressive Wages will cover eight in 10 full-time lower-wage workers, and the PW Mark is expected to bring the coverage of Progressive Wages up to 94% of full-time lower-wage workers. So, eight in 10 and moving up to 94%, I think we are quite confident that market forces will probably lift the remainder up over time.
Some Members, including Mr Yip Hon Weng, asked about how the LQS is currently being determined, and under what circumstances would it be reviewed. As the Workgroup’s Report explains, the LQS is a stable benchmark that has been in place for many years. It has been revised four times in the last five years.
We recognise that the new LQS requirement in 2022 will have a significant impact on employers. We are also mindful and sensitive to the fact that many of our companies are still recovering from the effects of COVID-19 on our economy. Hence, we have no plans to further increase the LQS for now, but will focus on the implementation of the new LQS rules and also for the other Sectoral and Occupational Progressive Wages to establish their relevant wage benchmarks.
I urge Members not to look at each measure in isolation but to bear in mind the overall and holistic impact on not just the workers but also the employers.
Members have also asked about the implementation details. I would like to give the assurance that the intent of MOM is for firms to be well-informed of the moves and to have adequate time to adjust before the implementation.
To Mr Edward Chia’s query, firms that hire foreign workers are already familiar with the concept of LQS for many years. Together with tripartite partners, the Government will continue to reach out to firms before the new LQS requirement and other new Progressive Wages kick in on 1 September 2022. The initial period beyond its introduction will be a run-in period, for which MOM will focus on educating employers on the various Progressive Wage and LQS requirements that they will need to adhere to. In other words, I can assure employers that MOM will not jump straight into strict enforcement, but it will initially focus on improving awareness and compliance, because we are all moving towards a new system. This is the same approach that was adopted when new Employment Act obligations were introduced in 2016.
In designing the system to support the new moves, we will make the compliance process as smooth as possible. To Miss Rachel Ong’s query, we will keep additional reporting requirements minimal by tapping on existing processes such as CPF salary declarations and returns to MOM’s Business Census.
Employers will also be able to refer to MOM’s website to check the job descriptions of workers eligible for Progressive Wages and the required wages. We will also explore ways to allow employees to check that they are paid the Progressive Wages due to them. So, employees also have a chance to get used to the new system. We note that the Singapore Business Federation has acknowledged that the Report of the Workgroup has taken into consideration their feedback on minimising the burden of compliance for firms.
To Mr Liang Eng Hwa’s query on how the PW Mark will be administered, we will tap on the same systems that I have just described, to ensure that only firms that pay Progressive Wages are awarded the PW Mark. This will assure companies and consumers that when they purchase from firms with the PW Mark, they are directly supporting the lower-wage workers in these firms. The public sector will take the lead and require its suppliers to obtain the Mark. As the support of private sector buyers is also essential, the tripartite partners will also work with the various trade associations and chambers to raise awareness of the PW Mark, promote its adoption and encourage businesses to purchase from other businesses with the PW Mark.
Mr Speaker, Sir, uplifting lower-wage workers is a whole-of-society responsibility, and the cost of raising their wages will have to be shared. So, workers will have to adopt the right mindset and be ready to adapt and learn new skills to be more productive. Employers will need to increase productivity at the firm-level, which would help them better absorb the additional wage costs.
The Government will do its part, too. With respect to employers, the Government recognises that employers will need some time to adjust their operations, especially as the economy is still recovering from COVID-19. As such, to the queries of Ms Jessica Tan and other Members, the Government has accepted the recommendation of the Workgroup to provide transition support and is carefully studying the details of that support. This will be announced in due course and, certainly, I want to provide the assurance that this will come before the implementation of the first moves in September 2022.
With respect to workers, I have already touched on the Government’s commitment to expanding Workfare. So, to Miss Rachel Ong’s question on whether there will be a shift away from Workfare to employers paying for the wages of our lower-wage workers, the answer is no. The Government is committed to Workfare as a permanent scheme; at the same time, employers do their part by offering progressive wages.
Miss Rachel Ong asked why we are lowering the Workfare qualifying age to 30 years old and whether we will lower it further below the age of 30. Below the age of 30, most workers would have just started work and earning starting salaries. Most will have greater potential for future income growth. Therefore, it will be too premature to consider them for Workfare. They could be better supported through training and upskilling efforts, such as SkillsFuture, to help them access better jobs and grow their wages in a sustainable way.
For workers aged 30 to 34, however, some continued to remain in the lower-wage range despite the upskilling efforts. At this age, they are just starting their own families or are looking to buy their first home. We believe that Workfare will help them better cope with their current expenses and to start saving for their retirement.
Miss Cheng Li Hui and other Members asked if businesses will unfairly raise prices. I can certainly understand why this is a big concern for many of us. In the Food Services and Retail sectors, where there are many firms competing and barriers to entry are not high, firms will be expected to think carefully about cost increases. It is also fair to say that we have to expect some degree of cost increase to accommodate higher salaries for our lower-wage workers. This is where we, as consumers, have to do our part in support of our lower-wage workers.
I, therefore, hope that Singaporeans will not accuse firms unfairly of profiteering, but let us also work together to address any unreasonable price increases or practices. One reason why the Workgroup recommended that the National Wages Council help to provide guidance on wage growth is to enable the tripartite partners to carefully weigh the impact of wage growth, inflation and general economic conditions every year, before finalising their guidance.
Because the growth of Progressive Wages is negotiated through tripartite consensus, rest assured we have more assurance that wage increases will be sustainable for workers, employers as well as consumers.
Mr Speaker, Sir, the effort to uplift our lower-wage workers is a massive undertaking, spanning the next decade and beyond. To do this well, we will need to go beyond a whole-of-Government approach, or even a whole-of-tripartite sector approach. We will need the whole of society – workers, consumers, employers, unions, the Government, members of the public – to come behind and support this effort.
The Government has committed to providing transitional support and increasing spending on Workfare. Tripartite partners have agreed on a roadmap to chart the progress of our lower-wage workers over the next decade. And many businesses and consumers already recognise that they will need to do their part by paying a little more for goods and services. There has been heartening support from society at large since the Prime Minister spoke at the National Day Rally. I would also like to thank the tripartite partners for helping chart this roadmap ahead. So, let us continue on this course, to bring society together behind the goal of supporting our lower-wage workers.
Mr Speaker: Ms Hazel Poa.
Ms Hazel Poa (Non-Constituency Member): I thank the Senior Minister of State for his reply. I would like to point out that I have listened to his reply, but I still did not get the answer to my question, which was: how many Singaporeans earning less than $1,400 would not be covered by this scheme? On top of that, I have two supplementary questions.
Firstly, would employers who wish to employ foreigners no longer be able to employ part-timers at under $1,400? Would this spell the end of part-time employment?
Last question: the Senior Minister of State mentioned that over the years 2009 to 2019, the real wage growth of the lowest quintile outperformed those of the highest. If we look at only wage growth, it does not include other incomes like investment income or rental income. So, this does not quite give us the full picture of how inequality is changing. Does MOM track similar data but in terms of total income?
Mr Zaqy Mohamad: I thank Ms Hazel Poa for her query. In fact, in response, I did share that 23% of the remainder would be in businesses that do not hire foreign workers. So, it is a minority left: 23% out of your 103,000 full-time employees. So, it is about 20%, or 20,000 or thereabouts. And as I have shared, with progressive wages, you will end up, hopefully, covering up to 94% of our lower-wage workers. You will see the long-term impact in terms of how their wages will grow over time.
Also, bear in mind that the remainder that is left are typically those in microbusinesses. Like I have shared, in heartland shops, they are people you are very familiar with and the last thing you want is to have them collapse in the short term because they do not have the scale. And many of them are uncles and aunties running stalls and I am not even sure whether the uncle pays the auntie full wages. But these are areas in which I think we have to correct over time, but you do not want to collapse them in the short term. So, this is something we are very mindful not to disrupt the whole system in such a way.
On the Member’s second question on part-timers, if you look at the new LQS mechanism today, we do have a rate for part-timers, which is $9 per hour. We also give you half a count for DRC if you employ at least half of the LQS rate, that is, $700 a month for part-timers. So, this is one way in which we still maintain the current system but, at the same time, provide some flexibility for part-time workers, for many of our employees. That one, employers do not have to worry too much because they are familiar with the system and the part-time mechanism still continues. It is just that we now set a $9 rate per hour for part-time workers.
Note(s) to Question No(s) 28-41:
¹ To ask the Minister for Manpower (a) how often and under what circumstances will the Local Qualifying Salary (LQS) be reviewed and revised; and (b) what support will the Government provide to companies in sectors that are traditionally more reliant on foreign manpower and badly hit by the pandemic, such as the construction sector, to afford the LQS for all their local workers.
Work Passes Issued under CECA
2 August 2021
Ms Hazel Poa asked the Minister for Manpower, to date, what is the total number of work passes that have been issued to foreign nationals (not restricted to Indian nationals) who belong to any of the 127 professions listed under Annex 9A of the India-Singapore Comprehensive Economic Cooperation Agreement (CECA).
Dr Tan See Leng: I refer to the reply to Question No. 29 for written answer standing on the Order Paper for 2 August 2021 filed by Mr Leong Mun Wai. It was already explained in the 6 July Ministerial Statements that the 127 professions listed under Annex 9A of CECA do not have any bearing on our assessment of work pass applications. In processing work pass applications, the Ministry does not ask if an applicant is seeking to enter under Annex 9A of CECA as there is no such route. All foreigners who wish to work in Singapore need to meet the prevailing work pass criteria before they are granted a work pass. As such, the Ministry does not track or report employment data based on the occupational grouping requested by the Member.
Moreover, it is not meaningful to look at the number of non-Indian professionals belonging to any of the 127 professions, as requested by the Member. A foreign professional from any other country would be unlikely to have any link to India or CECA.
Nevertheless, if the Member is interested to know broadly the share of work pass holders (all nationalities) amongst all workers under the much broader Singapore Standard Occupational Classification (SSOC) Group 2 (Professionals)¹, the answer is that they make up less than one-quarter of all employed persons in SSOC Group 2.
Note(s) to Question No(s) 31:
¹ Residents data are classified based on SSOC 2020. Non-residents data which were coded based on SSOC 2000 were mapped to SSOC 2020 as far as possible to facilitate data comparability.
Unemployment Rate of Citizens by Wage Decile
26 July 2021
Ms Hazel Poa asked the Minister for Manpower what is the current unemployment rate of citizens by wage decile based on last drawn salary.
Dr Tan See Leng: MOM does not track unemployment rates based on last drawn salary, which can be influenced by several factors such as age, education, hours worked, industry and occupation. Instead, as with the approach taken globally by other national statistical agencies, we track unemployment rates disaggregated by age, gender, education qualifications and occupations. These figures are released on a regular basis through our labour market reports.
Local Professionals, Managers and Executives
26 July 2021
Ms Hazel Poa asked the Minister for Manpower from 2005 to 2020, what are the annual breakdown numbers of local Professionals, Managers and Executives.
Ms Hazel Poa asked the Minister for Manpower from 2005 to 2020, what is the annual breakdown number of self-employed workers.
Dr Tan See Leng: The information can be found in the annual Labour Force in Singapore reports, which are available online. For the year 2020, for example, the information is contained in Table 35 (Resident PMEs) and Table 52 (Resident Own Account Workers). Longer time series data from 1991 onwards for these two groups is also available on MOM’s website.
26 July 2021
Ms Hazel Poa asked the Minister for Manpower what is the current number of citizens, Permanent Residents, Employment Pass holders and S Pass holders in each of the (i) finance (ii) infocomm (iii) professional services and (iv) other sectors.
Dr Tan See Leng: The Member will be able to find the number of employed residents by industry sector in the Labour Force in Singapore reports. This is published annually and available on MOM’s website.
MOM does not further break down employed residents in each industry sector by Singapore Citizens and Permanent Residents. This is aligned with international practice and ensures international comparability, as statistical agencies worldwide typically cover the population residing in their country without a breakdown by nationality. We question the Progress Singapore Party’s fixation on drawing lines, first between Employment Pass (EP) holders and locals and now drawing lines among locals. In any case, the Member will also be able to note that in a 2020 Occasional Paper, MOM reported that Singapore Citizens consistently make up around 85% of the resident labour force.
As for the number of EP holders in the industry sectors, the Ministerial Statement by the Minister for Manpower on 6 July 2021 already stated that there were around 177,000 EP holders in our overall workforce in 2020. The Infocomm and Professional Services sectors account for around one-fifth each, while the Finance sector accounts for another one-seventh.
As for S Pass holders, there were around 174,000 S Pass holders in 2020. The Finance, Infocomm and Professional Services sectors collectively account for around one-eighth of S Pass holders.
The Member is advised to refer to published data to get the information she is interested in.
Visas Issued under Free Trade Agreements
5 July 2021
Ms Hazel Poa asked the Minister for Manpower for each year from 2005 to 2020, how many (i) dependant passes and (ii) Long Term Visit Passes have been issued to relatives of nationals from China, India, USA and Australia who are Employment Pass or S Pass holders respectively.
The Minister for Manpower (Dr Tan See Leng): Mr Speaker, may I have your permission to address Oral Question Nos 1 to 3, as well as Written Question Nos 19 to 24 in today’s Order Paper through the Ministerial Statements to be delivered by Minister Ong Ye Kung and myself tomorrow, 6 July 2021?
Mr Speaker: Yes, please.
Fair Consideration Framework Watchlist
1 February 2021
Ms Hazel Poa asked the Minister for Manpower in view of the fact that companies that have not broken any rules or regulations are placed on the watchlist for indicators like high proportion of employees from certain nationalities, whether the rules and regulations will be reviewed to cover these indicators that have given the Ministry cause for concern.
Mrs Josephine Teo: Employers in Singapore have diverse manpower needs. As a result, their workforce profiles and hiring practices vary widely. This is not a concern as long as employers uphold the letter and the spirit of the Tripartite Guidelines on Fair Employment Practices (TGFEP). In particular, they must consider all qualified applicants fairly.
Besides investigating complaints of discriminatory hiring, MOM carries out proactive surveillance. This includes identifying companies whose share of foreign Professionals, Managers, Executives and Technicians (PMETs) is noticeably higher than their industry peers, or which have a high concentration of a single foreign nationality source. They are then placed on the Fair Consideration Framework (FCF) Watchlist, during which their work pass applications are subject to closer scrutiny. These companies are also engaged by the Tripartite Alliance for Fair & Progressive Employment Practices (TAFEP) to help them improve their Human Resource (HR) practices and local hiring.
In most instances, the employers updated their hiring and expanded their employment of local PMETs with help from Workforce Singapore. Since 2016, firms on the FCF Watchlist have hired more than 4,800 Singaporean PMETs in total. Many of the firms have adjusted their HR practices and made sufficient improvements in their workforce profile to exit the FCF Watchlist within a year. For the minority of Watchlist firms who are uncooperative, they are barred from work pass privileges. This approach has therefore allowed for calibrated treatment depending on the employers’ responses, and has expanded local employment more so than rules that uniformly penalise all firms on the Watchlist.
5 July 2021
Ms Hazel Poa asked the Minister for Manpower for each year from 2005 to 2020, how many nationals from China, India, USA and Australia have been issued (i) Employment Passes (ii) S Passes (iii) Work Permits (excluding foreign domestic workers) and (iv) letters of consent respectively.
Ms Hazel Poa asked the Minister for Manpower (a) what is the current proportion of nationals from China, India, USA, and Australia by industry; and (b) what are the commonly held jobs by these nationals in each industry.
Ms Hazel Poa asked the Minister for Manpower what is the current breakdown of the numbers of Employment Pass holders, S Pass holders and Work Permit holders (excluding foreign domestic workers) by industry as per the breakdown in the Singapore Standard Industrial Classification 2015.
Dr Tan See Leng: The questions will be addressed by the Ministerial Statements to be delivered by Minister Ong Ye Kung and Minister Tan See Leng on 6 July 2021.[Please refer to “Free Trade Agreements and Foreign Manpower”, Official Report, 6 July 2021, Volume 95, Issue No 32, Ministerial Statement section.]
Gig Workers
2 February 2021
Ms Hazel Poa asked the Minister for Manpower (a) how many gig workers are there currently in the workforce; (b) what industries are these individuals working in; (c) what are the average salaries of these individuals by industry; and (d) how many of these gig workers are classified as self-employed.
Mrs Josephine Teo: There is no internationally accepted definition of “gig workers”. In general, the term refers to own account workers or self-employed persons (SEPs) who operate their own business without hiring any employees¹, and who source for a significant part of their work through online matching platforms.
In 2020, 190,900 residents were engaged primarily as SEPs for their livelihood. Over the past decade, such SEPs’ share of the workforce has remained stable at 8% to 10%. Among the 190,900, there were 73,500 who utilised online matching platforms, mostly working in the transportation of goods and passengers. Table 1 shows the breakdown of the top three occupations, namely private-hire car drivers, taxi drivers, and car and light goods vehicle drivers, and Table 2 reflects the corresponding median incomes.
In 2019, the median income for these three occupations was between $1,500 to $2,500. In 2020, SEPs’ income from work² was impacted by COVID-19 pandemic to varying degrees. Many were eligible for support of up to $9,000 from the SEP Income Relief Scheme (SIRS), Workfare Special Payments of up to $3,000, as well as regular Workfare payouts amounting up to $2,667 in 2020³, as well as the Point-To-Point Support Package, which comprises two components for taxi and PHC drivers:
(a) Special Relief Fund (SRF), to help full-time drivers defray business cost, and
(b) Government and NTUC Driver Care Fund for drivers who may not qualify for the SRF but still require financial assistance.
Note(s) to Question No(s) 28:
¹ This does not include other self-employed categories such as ’employers’ and ‘contributing family workers’.
² Based on those working on a full-time basis
³ Individual would be eligible if he/she also meets the other qualifying criteria, such as the annual value of the property he/she lives in.
10 May 2021
Ms Hazel Poa asked the Minister for Manpower (a) whether she can provide an update on the measures that the Ministry is studying to better protect gig workers; and (b) whether a review will be conducted on the definition of employees versus freelancers so as to better protect those who are employees in all but name.
Mrs Josephine Teo: We thank the Members for their interest. During this year’s Committee of Supply debate, I explained at length the Government’s thinking on the issues concerning gig workers and the steps we had already taken. We are actively studying further measures to safeguard their well-being, including helping them better meet healthcare and retirement needs. As there are multiple considerations to take into account, we need more time and will provide an update in due course.
Service Standard for SGUnited Funding Programmes
5 April 2021
Ms Hazel Poa asked the Minister for Manpower (a) what is the service standard for the payout of SGUnited funding support to employers; and (b) what proportion of payments are within this timeframe.
Mrs Josephine Teo: Workforce Singapore (WSG) works closely with the Singapore Business Federation (SBF), our programme partner for the SGUnited Traineeships (SGUT) and SGUnited Mid-Career Pathways (SGUP) programmes, to administer these programmes. SBF’s role includes advising host organisations that are keen to offer traineeships and attachments, monitoring the progress of these programmes, as well as processing applications and claims.
Since the roll-out of SGUT and SGUP last year, we have seen strong interest from organisations to take in trainees. As of 1 March 2021, there have been more than 8,600 trainees hosted by over 2,400 organisations. Each of the host organisations submit monthly claims for co-funding of the training allowances.
Correspondingly, SBF has received a high volume of claims. Host organisations need to submit relevant supporting documents, including proof of payment to the trainees, and progress reports signed off by the trainees and host organisations. To ensure proper governance of public monies, SBF must check the documents for completeness and accuracy before disbursing the payout to the host organisations.
As of 1 April 2021, SBF has received around 27,000 claims, of which 60% has been processed and the payouts disbursed to the host organisations. About 20% are pending clarifications from the host organisations due to incomplete or incorrect information. The remaining 20% are still being processed by SBF, and includes more recent claims received in March and April 2021.
To speed up processing of claims, SBF has expanded its resources. It now has a dedicated team of more than 40 staff for the administration of these programmes, of which about one-third support claims processing. SBF will continue to ramp up hiring as necessary. In addition, SBF launched a new claims portal in January this year, which makes it easier for host organisations to submit and track their claims. For pending claims submitted with complete documentation in March 2021 or earlier, SBF is working towards disbursing the payouts before the end of April 2021.
SBF has acknowledged the concerns of host organisations that have paid out the allowances to trainees but have yet to receive reimbursement. Going forward, it aims to process claims and disburse the payouts within four weeks if all supporting documentation is in order.
Special Fund for Foreign Workers’ Medical Care
5 April 2021
Ms Hazel Poa asked the Minister for Manpower in light of the Ministry’s reply on 8 March 2021 on a special fund that is used to ensure that no foreign worker is denied the medical care needed (a) whether this special fund is fully financed by the Government; and (b) how much money has been paid out of this special fund for foreign workers’ medical bills because the employers are unable to pay.
Mrs Josephine Teo: Employers of Work Permit and S Pass holders are responsible for the medical expenses of their workers to ensure that such costs are not ultimately borne by taxpayers. For this reason, they are required to purchase insurance coverage of at least $15,000 per year. This covers about 95% of hospital bills incurred by such workers.
To have further protection against larger medical bills, employers may pay additional premiums for higher insurance coverage. Those who do not would have to bear these additional expenses out-of-pocket. In extenuating circumstances, MOM has stepped in to help and the worker is not denied appropriate treatment despite their employers’ inability to meet their obligations. In the last three years, an average of 25 employers and their workers annually were supported, and most of the workers were domestic workers employed by Singaporean households. The average bill size of these workers was $45,000 and the amount supported was about $29,000 per worker.
As previously shared, MOM is reviewing the medical coverage for migrant workers and will provide an update in due course.
Supporting Dormitory Operators to Comply With COVID-19 Measures
1 February 2021
Ms Hazel Poa asked the Minister for Manpower how much has been spent on supporting dormitory operators to comply with COVID-19-related measures and whether these dormitory operators are required to reimburse the Government for this expenditure.
Mrs Josephine Teo: At the height of the COVID-19 outbreak in the dormitories, the Government needed the full cooperation of dormitory operators to contain the infections in the dormitories quickly, and take care of the well-being of their residents. These included stepped-up and additional cleaning and disinfection services, utilities provision associated with the increased duration that migrant workers had to spend in the dormitories, manpower and infrastructure needed to meet the new Safe Living requirements in dormitories. As these were new impositions not originally catered for by the dormitory operators, the Government introduced support schemes to reimburse them for qualifying expenses incurred over a limited period from April to August last year.
Till date, the Government has provided $4.6 million of reimbursement directly to dormitory operators who had to manage about 160,000 migrant workers. There are further claims that are pending assessment and clarifications.
MOM, in our assessment of the claims, check that dormitory operators have exercised financial prudence in their purchases and the reasonableness of the claim amounts. We also impose a cap on the amount claimable based on our assessment of a reasonable claim.
Skills Transfer from Employment Pass Holders to Local Workers
1 February 2021
Ms Hazel Poa asked the Minister for Manpower (a) what measures are in place to ensure skills transfer from employment pass holders to local workers to build up local capabilities; (b) how are companies currently committed to such skills transfer; (c) whether there is a timeframe for companies to ensure such skills transfer; and (d) if so, what is the timeframe.
Mrs Josephine Teo: Helping our people acquire skills to access good jobs has been a long-standing priority for the Government. In the 1990s, about three in 10 employed locals were in Professional, Manager, Executive and Technician (PMET) jobs. Today, about six in 10 employed locals are in PMET jobs. This is achieved through creating good jobs, motivating individuals to upskill or reskill, promoting employer commitment to fair hiring and progression, and sustaining Government investments in education and training.
For PMETs, the process of skills transfer is rarely linear or one-to-one. In the course of developing their careers, PMETs learn from a variety of people including their peers, superiors, customers and suppliers. They may also acquire valuable skills through a range of assignments, including overseas postings, and even job changes to gain exposure to different industries or markets. Structured training programmes also play a part. These opportunities for skills acquisition require employers that are supportive and intentional in staff development, as well as individuals who take ownership of their learning and development. The Government commits significant resources to expand such opportunities through the Skillsfuture movement and the many programmes in place to upskill and reskill our workforce.
In regulating the presence of work pass holders in Singapore, our aim is to enable businesses to continually create good jobs while keeping the labour market tight. For the broad majority of PMETs, these conditions provide better benefits than prescriptive micro-measures targeted at specific work pass holders. With more jobs requiring higher skills, there is added impetus to level up skills acquisition through multiple pathways.
Our work pass policies are therefore regularly reviewed and adjusted. For example, we raised the qualifying salary criteria for Employment Pass applicants in 2017 and twice more in 2020. Likewise, for S Pass holders, we reduced the S Pass sub-Dependency Ratio Ceilings for the Services, Construction, Marine Shipyard and Process sectors in the past two years.
We will continue to review and adjust our work pass policies in support of local employment outcomes.
CPF Late Payment Interest
2 November 2020
Ms Hazel Poa asked the Minister for Manpower what is the amount of late payment interest collected by the CPF Board (i) each year from 2009 to 2019 (ii) since inception and (iii) in 2020 to date.
Mrs Josephine Teo: A late payment interest of 1.5% per month is currently charged on employers to deter them from paying CPF contributions late for their employees. The interest rate is broadly in line with other late payment penalties imposed on employers for foreign worker levy and GST. The late payment interest collected is used to cover the interest that the employees should have earned if the CPF contributions were paid on time. It is also used to partially offset the costs incurred by the CPF Board when recovering these late contributions.
If we expressed the amount of late payment interest collected as a percentage of CPF contributions, the ratio has hovered at around 0.05 to 0.06% for the past 10 years including the first half of 2020. The amount of late payment interest collected each year is published in CPF Board’s annual reports.
We understand that some employers may face difficulties making CPF contributions on time during an economic downturn. The CPF Board will extend assistance to these employers on a case by case basis.