Assistance to SMEs on Hiring of Locals

Er Dr Lee Bee Wah asked the Acting Minister for Manpower with the restrictions on the hiring of foreign workers on SMEs (a) what percentage of work passes were rejected when they were submitted for renewal over the last one year; and (b) since its introduction, how many companies have tapped on ADVANTAGE! Scheme to help them hire more locals.

The tightening measures on foreign work passes are not targeted at SMEs. All companies with foreign manpower are affected. Those who employ a larger proportion of foreign workers or a smaller base of local workers will be affected more.

From 1 January 2012 to 31 July 2012, 30% of Employment Pass (EP) and S Pass applications were rejected, an increase from 26% for the whole of 2011. And 29% out of the total number of rejected applications were for renewals, an increase compared to 21% for the whole of 2011. The higher rejection rates were due to

a) The increase in EP and S Pass qualifying salaries from 1 July 2011. To give companies time to adjust, existing EP and S Pass holders who were due for renewal before 1 January 2012 were given at least an additional year to meet the prevailing more stringent criteria;

b) The tightening of the educational qualifications for EPs, and with older applicants having to command a higher salary commensurate with their working experience and the quality expected of them, from 1 January 2012; and

c) The tightening of the S Pass sub-Dependency Ratio Ceiling (DRC) from 25% to 20% of the total workforce from 1 July 2012, which has taken effect for all new foreign workers. However to give companies time to adjust their strategies, their existing foreign workers will have up to 30 June 2014 to comply with the new DRCs.

Since its introduction in 2005, more than 3,000 companies have tapped on ADVANTAGE! to recruit, retain and re-employ more than 26,000 mature local workers. We will continue to work with tripartite partners to help employers tap on our valuable pool of older residents for their manpower needs.