Rationale for Exemption from Fair Consideration Framework and Complementarity Assessment Framework

The Fair Consideration Framework (FCF) sets out requirements for all employers in Singapore to consider the workforce in Singapore fairly for job opportunities. One requirement of FCF is the job advertising requirement. Employers must first advertise on MyCareersFuture and fairly consider all candidates, before submitting an Employment Pass (EP) or S Pass application. This is intended to promote fair employment practices and improve labour market transparency. In comparison, the Complementarity Assessment Framework (COMPASS) is a holistic points-based assessment which, together with the EP qualifying salary, ensures that EP holders are of sufficiently high quality and complement our local workforce. That is how both the FCF and COMPASS work together to safeguard good employment outcomes for locals. As the FCF job advertising requirement and COMPASS impact small firms in different ways, the thresholds for small firms are also different under these two policies. Let me elaborate.

Small firms with fewer than 10 employees are exempted from the FCF job advertising requirement. This is for pragmatic reasons. We recognise that micro-sized firms have limited resources and are mindful of the administrative burden of various rules and regulations on such firms, notwithstanding the good intentions. The job advertising requirement is only one part of FCF. Exemption from the job advertising requirement is not the same as exemption from the FCF. All employers are still expected to practise fair consideration and merit-based hiring, as set out in the Tripartite Guidelines for Fair Employment Practices. MOM will investigate all complaints of unfair hiring practices, regardless of the size of the firm in question.

COMPASS has four foundational criteria and two bonus criteria. EP applications need to score 40 points to qualify for an EP. Small firms with fewer than 25 PMET employees will score 10 points, by default, on the two firm-related criteria on Diversity and Support for Local Employment. This is because the workforce ratios for these two criteria are not meaningful for firms with a relatively small number of PMET employees, as the ratios are easily skewed by small changes in their personnel. Hence, it is more reasonable to give such firms a default score on these firm-related criteria. However, these same firms will still need to score another 20 points on the individual-level or bonus criteria. This ensures that their EP candidates are of sufficiently high quality and complementary to our local workforce.

Moreover, as these small firms grow over time, they will, subsequently, be held to the same requirements as other firms on the firm-related criteria. Therefore, they will still have an incentive to build up a strong local workforce and diverse foreign workforce.

I hope this helps to explain why the threshold used to determine small firms under FCF and COMPASS is different. It is not because one scheme is more lenient than the other, but because the underlying rationale is different. The treatment for small firms under FCF and COMPASS is designed to take into account the circumstances of such small firms and ensure that our policies do not affect them disproportionately.

Ultimately, it is in our interest to ensure that we have a conducive environment for both local and foreign startups to anchor themselves in Singapore and to scale up, creating more job opportunities for locals.