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Companies have more operational
flexibility as MOM raises the dependency ceiling for manufacturing and
services sectors. Skilled foreign worker levy partially restored in light of
economic recovery. |
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With effect from 1 July 2005, the Ministry of
Manpower (MOM) will make the following changes: |
a) Raise the skilled foreign worker levy from $50
to $80. There will be a further increase from $80 to $100 from 1 January
2006.
b) Increase the Manufacturing sector Dependency Ceiling from 50% to 60% and
the Services sector Dependency Ceiling from 30% to 40%. Foreign workers hired
above the existing Dependency Ceilings (that is, 50% for Manufacturing Sector
and 30% for Services sector) will attract a new higher levy of $500 (skilled
or unskilled). |
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Increase in Skilled Foreign Worker Levy for all
Sectors |
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The skilled foreign worker levy was reduced
substantially in 1998 and again in 1999 to help companies tide over the
economic downturn. Since then, the levy has been increased by only $20 - from
$30 to $50 in July 2004. With the recovery of the economy, it is timely to
gradually restore the foreign worker levy. |
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MOM will progressively raise the skilled foreign
worker levy, from $50 to $80 with effect from 1 July 2005, and to $100 with
effect from 1 January 2006. The increase will apply to all skilled foreign
workers across all sectors. The increase is staggered in 2 stages to allow
companies time to make the necessary adjustments in response to the increase. |
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Increased Flexibility in Manufacturing and
Services Sectors |
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Business cycles have become less predictable, and
companies need greater flexibility to take advantage of new opportunities
quickly. Some may need more foreign workers when Singaporeans cannot be
immediately found to fill vacancies. |
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MOM will thus increase the Dependency Ceiling (DC)
- the number of work permit holders a company can hire in its total workforce
- to 60% and 40% for the manufacturing and services sectors respectively, with
effect from 1 July 2005. |
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However, companies will have to pay a higher levy
of $500 for every additional foreign worker (skilled or unskilled) that they
hire above the existing DC of 50% for Manufacturing and 30% for Services.
Companies which are below the existing DCs will not be affected. Please refer
to Annex for details. |
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The changes to the DCs will provide companies with
greater operational flexibility, and encourage them to expand their operations
here. This will, in turn help create more jobs for Singaporeans over time when
businesses grow. |
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The higher levy of $500 goes towards ensuring that
companies make judicious use of foreign workers, and also narrows the wage gap
between local and foreign workers. |
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More..... (Annex) |
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Source:
Ministry of Manpower Press Release 10 Mar
2005 |
MOM fine tunes foreign worker policy 
