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Singapore acts to curb hiring of unskilled foreigners

Publication Date : 27-02-2013

 

In a move to curb contractors from hiring unskilled foreign workers beyond their quota, a hefty S$950 (US$767) monthly levy will be imposed on them from next year.

In 2015, it will cross the S$1,000 psychological barrier, with the monthly rate set at S$1,050, the Ministry of Manpower (MOM) announced yesterday.

Currently, contractors pay S$650 for every unskilled foreigner they hire beyond the approved number for a building project.

These new rates are the most severe on the list of increased levies for various sectors as the construction industry is among the most dependent on foreign workers and the slowest to improve its productivity.

The list made public yesterday comes one day after Budget 2013 announced that levies for unskilled foreign workers will be raised to slow the inflow of foreigners and help lift productivity.

The service sector, also heavily reliant on foreign workers, will face higher levies too.

But the increase is less severe.

The levy for a restaurant hiring an unskilled foreign worker will be up to S$700 next year and up to S$800 in 2015. The maximum levy now is S$550 a month.

The service sector, however, will face a double whammy because its foreign worker quota will be cut from July this year.

But firms in services and manufacturing that hire skilled foreign workers will not be subjected to higher levies from next year.

In explaining the new round of increases, Acting Manpower Minister Tan Chuan-Jin said it will drive Singapore towards a "manpower-lean" economy. "This goes beyond substituting foreign manpower with local labour," he added as he reiterated a point made by Deputy Prime Minister and Finance Minister Tharman Shanmugaratnam in his Budget speech.

Tharman had said the pace of growth of foreign workers must be slowed as the economy restructures.

Singapore has been gradually tightening the inflow of foreign workers since 2010, with reduced quota levels and increased levies.

Besides levies, two other measures that are expected to bring relief to firms were also announced.

One is for skilled foreigners who hold an S Pass, whose minimum salary eligibility has been raised from S$2,000 to S$2,200.

While the higher salary will kick in for new applicants from July, existing S Pass holders can renew their passes at the current S$2,000 until the end of this year, but only if they stay with their present employer.

The other measure is an extension of a pilot scheme that allowed hotels to hire foreign workers to perform more than one job.

From July, all companies in the service sector will be allowed to do it. Currently, the worker must be hired for a specific job.

More details on it will be given during the debate on the ministry's budget next month, said MOM yesterday.

Zainudin Nordin, who heads the Government Parliamentary Committee for Manpower, said companies have to tap schemes like the new Wage Credit Scheme to adjust and adapt.

But M-Luck Management, which provides hotels with chambermaids, said it will pass on the higher costs to customers.

Its chief executive Frederick Wong sees a crunch in 2015 as Singaporeans shun such work.

"With over 8,000 hotel rooms being built from now until 2015, that's another 800 housekeeping jobs. How are we going to find the 500 Singaporeans to do it if we tighten the tap on foreigners?"

 

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