Companies Who Reduce Headcount of Existing Employees While Leveraging JGI to Recruit New Workers

Debated in Parliament on 14 Oct 2020.

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Mr Murali Pillai questioned the safeguards against companies reducing existing headcount while using the Jobs Growth Initiative (JGI) to hire new workers, potentially resulting in no net job growth.
The Minister for Manpower explained that JGI eligibility requires firms to increase their local workforce from August 2020 levels, and payouts stop if headcount falls below that baseline or if new hires do not meet minimum wage criteria.
To address valid employee departures like retirements, JGI payouts are reduced proportionally based on the number of existing employees who leave after the scheme starts, balancing firm flexibility with incentives to retain workers.
The Inland Revenue Authority of Singapore employs data analytics and a dedicated review team to detect and prevent abuse, with serious consequences including police investigation for any malpractices.
The overall approach aims to ensure JGI supports meaningful job growth while preventing gaming of the system, without imposing rigid conditions that could hinder firm operations.

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Murali Pillai

Mr Murali Pillai asked the Minister for Manpower in respect of the Jobs Growth Initiative (JGI), what safeguards will be put in place to guard against companies reducing their headcount of existing employees and at the same time leveraging on the JGI to recruit new workers with the Government providing salary co-payment resulting in no net growth of jobs.

The Minister for Manpower (Mrs Josephine Teo)

Mr Speaker, the Jobs Growth Incentive or JGI, supports firms to accelerate the hiring of their local workforce over six months. JGI was announced in August 2020 and will be provided to qualifying hires from September 2020 to February 2021. Eligible local hires can attract salary support for up to 12 months.

To be eligible for JGI, firms must achieve an increase in their local workforce size from the level in August 2020.

Hence, a firm with no net growth of jobs will not receive JGI payouts. A firm that initially increased its local headcount but subsequently reduced its local headcount below its original level would also stop receiving future JGI payouts. In addition, to ensure that the increase in local workforce is meaningful, it must be accompanied by an increase in the number of local employees in jobs that pay at least $1,400 in gross monthly wages.

There may be valid reasons why a firm that receives the JGI has to later let existing employees go, such as retirement or voluntary resignations. If we were to impose the condition that the firm promises not to let any worker go, that would create significant rigidity to the firm. In practice, firms would likely prefer to moderate their new hiring than have to deal with the risk of support being withdrawn.

Hence, we take a practical approach, where a firm's JGI payout is reduced in proportion to the number of existing employees that left the firm after the scheme started in September 2020. This gives the firms assurance of funding support while signalling clearly that they should make the efforts to retain existing employees even as they bring in new hires.

In addition, IRAS has put in place a robust anti-gaming framework to identify risks and prevent abuse. IRAS uses data analytics and risk profiling to identify cases, which are sent to a dedicated team for review. We view any attempt to abuse grant schemes very seriously and will not hesitate to report any malpractices or abuses to the Police for investigation and possible prosecution.

Summary written by AI (learn more)

Mr Murali Pillai questioned the safeguards against companies reducing existing headcount while using the Jobs Growth Initiative (JGI) to hire new workers, potentially resulting in no net job growth.
The Minister for Manpower explained that JGI eligibility requires firms to increase their local workforce from August 2020 levels, and payouts stop if headcount falls below that baseline or if new hires do not meet minimum wage criteria.
To address valid employee departures like retirements, JGI payouts are reduced proportionally based on the number of existing employees who leave after the scheme starts, balancing firm flexibility with incentives to retain workers.
The Inland Revenue Authority of Singapore employs data analytics and a dedicated review team to detect and prevent abuse, with serious consequences including police investigation for any malpractices.
The overall approach aims to ensure JGI supports meaningful job growth while preventing gaming of the system, without imposing rigid conditions that could hinder firm operations.

Questions identified by AI (learn more)

Companies Who Reduce Headcount of Existing Employees While Leveraging JGI to Recruit New Workers | PAPERCUTS

Companies Who Reduce Headcount of Existing Employees While Leveraging JGI to Recruit New Workers

Debated in Parliament on 14 Oct 2020.

Summary written by AI (learn more)

Mr Murali Pillai questioned the safeguards against companies reducing existing headcount while using the Jobs Growth Initiative (JGI) to hire new workers, potentially resulting in no net job growth.
The Minister for Manpower explained that JGI eligibility requires firms to increase their local workforce from August 2020 levels, and payouts stop if headcount falls below that baseline or if new hires do not meet minimum wage criteria.
To address valid employee departures like retirements, JGI payouts are reduced proportionally based on the number of existing employees who leave after the scheme starts, balancing firm flexibility with incentives to retain workers.
The Inland Revenue Authority of Singapore employs data analytics and a dedicated review team to detect and prevent abuse, with serious consequences including police investigation for any malpractices.
The overall approach aims to ensure JGI supports meaningful job growth while preventing gaming of the system, without imposing rigid conditions that could hinder firm operations.

Questions identified by AI (learn more)

Full Transcript

Murali Pillai

The Minister for Manpower (Mrs Josephine Teo)

To be eligible for JGI, firms must achieve an increase in their local workforce size from the level in August 2020.

Summary written by AI (learn more)

Mr Murali Pillai questioned the safeguards against companies reducing existing headcount while using the Jobs Growth Initiative (JGI) to hire new workers, potentially resulting in no net job growth.
The Minister for Manpower explained that JGI eligibility requires firms to increase their local workforce from August 2020 levels, and payouts stop if headcount falls below that baseline or if new hires do not meet minimum wage criteria.
To address valid employee departures like retirements, JGI payouts are reduced proportionally based on the number of existing employees who leave after the scheme starts, balancing firm flexibility with incentives to retain workers.
The Inland Revenue Authority of Singapore employs data analytics and a dedicated review team to detect and prevent abuse, with serious consequences including police investigation for any malpractices.
The overall approach aims to ensure JGI supports meaningful job growth while preventing gaming of the system, without imposing rigid conditions that could hinder firm operations.

Questions identified by AI (learn more)

Companies Who Reduce Headcount of Existing Employees While Leveraging JGI to Recruit New Workers

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Questions Identified

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Murali Pillai

The Minister for Manpower (Mrs Josephine Teo)

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Companies Who Reduce Headcount of Existing Employees While Leveraging JGI to Recruit New Workers

Summary

Questions Identified

Full Transcript

Murali Pillai

The Minister for Manpower (Mrs Josephine Teo)

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Questions Identified