Plans to Raise Local Qualifying Salary to Benefit Lower-wage Earners

Mr Christopher de Souza asked the Minister for Manpower whether there are plans to raise the Local Qualifying Salary that is used to determine a company's work permit and S pass quota entitlement, to the 10th percentile income of Singaporeans for the benefit of a significant proportion of lower-wage earners.

To ensure that employers do not hire locals on token salaries just to increase their foreign worker quota, locals have to be paid at least the Local Qualifying Salary (LQS) to count toward calculations for the firm’s foreign worker quota. To uplift lower-wage workers, the Tripartite Workgroup on Lower-Wage Workers recommended in 2021 that firms be required to pay all their full-time local workers at least the LQS, and not only those counting towards the quota, in order to be eligible to hire foreign workers. The Ministry of Manpower (MOM) adopted this recommendation and implemented the new requirement on 1 September 2022.

This move will secure fairer wage outcomes for a larger group of lower-wage workers, who can be assured that their salaries will not fall below the LQS of $1,400. Our focus now is to ensure a smooth implementation of the new LQS requirement and to give firms time to adjust to this change.

The Ministry regularly reviews the LQS by taking into consideration the prevailing wage and economic conditions. In fact, we have raised the LQS four times since 2017, with the latest increase to $1,400 taking place in 2020. Hence, the member can be assured that the Government will continue to monitor the wage outcomes of locals and the economic climate, and adjust the LQS accordingly to ensure that our lower-wage workers continue to be uplifted alongside the rest of Singapore.