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Source:
www.mom.gov.sg
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Partial restoration of
Foreign Worker Levy (FWL) cuts |
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Foreign
Worker Levy to go up to moderate demand for foreign workers. Other
changes to streamline Foreign Worker controls and make them more
flexible. |
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The foreign worker levy (FWL) had been
substantially reduced in 1998 and 1999 to help companies tide over the
difficult economic environment. |
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Robust economic conditions over the past two
years have resulted in healthy job growth and a rising demand for labour. |
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In 2005, the number of new foreign work
permit holders increased by 43,000, the largest increase since 1997. As
the economy has recovered and to moderate the strong industry demand for
foreign workers, the Ministry of Manpower is partially restoring the
levy cuts. |
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As of 1 January 2007, the skilled foreign
worker levy will be raised from $100 to $150 for all sectors. |
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The Ministry of Manpower (MOM) is also
making some adjustments to streamline FW controls and make them more
flexible. These refinements are in response to feedback from various
industry sectors. |
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The changes are as follows: |
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All sectors |
(i) Partially restore the skilled foreign
worker levy from $100 to $150 for all sectors with effect from 1 January
2007. (See Annex
A for background of levy changes.)
(ii) Increase the S Pass quota for companies from 5% to 10% with effect
from 1 October 2006. |
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Construction |
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(iii) Extend the waiver of
Man-Year-Entitlement (MYE) requirement to Non-Traditional Source (NTS)
workers who have worked with any employer for six
or more years. A levy of $300 will be imposed on these NTS
construction workers who are exempted from MYE. The MYE allocation
will also be reduced by 5%. These changes take effect from 1
January 2007. |
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Services and Manufacturing |
(iv) Reduce the levy rate from $500 to
$450 for hiring Work Permit holders up to 10% beyond the
prevailing Dependency Ceiling (DC) in the Manufacturing and
Services sectors with effect from 1 October 2006.
(v) Introduce a new DC tier of 30% to 35% for the Services sector
from 1 January 2007. All foreign workers (skilled or unskilled)
employed within this new DC tier will attract a levy rate of $310.
The reduced $450 levy rate will apply to the DC tier of 35% to 45%
in the Services sector from 1 January 2007. (See
Annex B for summary of changes for the Services and
Manufacturing sectors.) |
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The details of the above changes are
elaborated in the following paragraphs. |
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Increase in S Pass Quota |
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The S Pass was introduced to help meet
companies¡¯ needs for mid-skilled manpower. |
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To accord greater flexibility to
companies and to facilitate the inflow of such manpower, the S
Pass quota will be raised from 5% to 10% with effect from 1
October 2006. |
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This additional 5% will come from
companies¡¯ existing Work Permit quota. This means that companies
can employ more S Pass holders, in lieu of Work Permit holders,
thereby improving the quality of their foreign workforce. The S
Pass levy remains at $50. |
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Optimizing Manpower Usage for the
Construction Sector |
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To encourage contractors to retain
their experienced workers, MOM waived the Man-Year-Entitlement (MYE)
requirement for NTS construction workers who have worked with the
same employer for six continuous years. |
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To grant greater flexibility to the
Construction sector, MOM will extend the MYE waiver to
Non-Traditional Source (NTS) workers who have worked for six years
with any employer with effect from 1 January 2007. |
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A levy of $300 will be imposed on
these construction NTS workers hired outside the MYE system. The
MYE allocation will correspondingly be reduced by 5%. |
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Increased Flexibility for the
Manufacturing and Services Sectors |
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Since 1 July 2005, to allow companies
greater flexibility to meet episodic surges in demand, companies
may hire Work Permit holders up to 10% beyond the prevailing DC
but at a higher levy of $500. With effect from 1 October 2006,
this levy rate will be reduced to $450. |
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In addition, a new DC tier from 30% to
35% will be introduced for the Services sector from 1 January
2007. All foreign workers (skilled or unskilled) employed within
this new DC tier will attract a levy rate of $310. The reduced
$450 levy rate will then apply to the DC tier of 35% to 45% in the
Services sector from 1 January 2007. |
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More..... (Annex) |
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¡¡ |
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Glossary for Technical Terms |
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Dependency Ceiling (DC) |
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The DC stipulates the proportion of
foreign workers a firm can hire. This prevents employers from
relying too heavily on foreign workers at the expense of local
employment. |
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Foreign Worker Levy |
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The levy puts a price on the
employment of a foreign worker. The levy serves to moderate demand
for foreign workers and to narrow the wage gap between local and
foreign workers. |
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Man Year Entitlement (MYE)
Allocation |
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The Man Year Entitlement allocation
system for Non-Traditional Source construction workers was
implemented in April 1998. Under this system, main contractors are
allocated MYEs for Non-Traditional Source workers based on their
project value. Over the years, MOM has made adjustments to the MYE
allocation formula, including the most recent reduction in MYE
allocation by 5%. |
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Skilled Worker |
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A skilled foreign worker is one who
possesses at least a SPM qualification or its equivalent, or a
NTC-3 (Practical) Trade Certificate [also known as ITE¡¯s Skills
Evaluation Certificate (Level 1) from July 2002] that is relevant
to the worker¡¯s occupation. |
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Source:
www.mom.gov.sg Press Release
14 Jul 2006 |
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Important
Notice |
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FrontPage Edition: Sat 15 July 2006
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