The Employment of Foreign Manpower (EFMA) Act covers the responsibilities and obligations of an employer hiring foreign workers in Singapore. These include any person issued with a work pass such as the Employment Pass, S Pass, and Work Permit by the Ministry of Manpower (MOM).
Here are some things as an employer that you need to know when hiring foreigners.
#1 Application For Different Work Passes
Employment Pass
The Employment Pass (EP) allows you to hire a foreign professionals, managers and executives to work in Singapore. Candidates must earn sufficient points under the new points-based Complementarity Assessment Framework (COMPASS) and also meet the minimum qualifying salary of at least $5,000 (and increases progressively with age, up to $10,500 for those in the mid-40s in the non-financial sector).
There is no foreign worker levy or quota required to hire a foreigner under the EP. Each EP application will cost $105 and first-time candidates would get up to 2-year duration pass, while renewals could be up to a 3-year duration.
S Pass
The S Pass allows you to hire mid-level skilled foreign workers performing specialised roles. Candidates must earn at least $3,000 as the minimum qualifying salary for the non-financial sector (and increases progressively with age for those in their mid-40s to $4,500).
Companies hiring foreigners on S Pass from 1 September 2022 must $450 (Tier 1 levy: for companies with S Passes up to 10% of their total workforce) or $650 (Tier 2 levy: for companies with S Passes up to 18% of their total workforce). Additionally, the S Pass quota for companies in the Manufacturing, Construction, Marine shipyard, Process sectors will be lowered from 18% to 15% of their total workforce from 1 January 2023.
Each S Pass application will cost $105 and will be for up to a 2-year duration.
Work Permit For Migrant Worker
The Work Permit (WP) allows you to hire semi-skilled migrant workers from approved source countries/regions to work in e Manufacturing, Construction, Marine shipyard, Process sectors. There is no minimum qualifying salary for hiring of migrant workers under WP.
Each WP application cost $35 and is generally for a 2-year duration, depending on the validity of the worker’s passport and duration of the security bond.
#2 Buy Security Bond For Each Migrant Worker
If you’re hiring non-Malaysian migrant workers, you must buy a $5,000 security bond from any bank or insurance company. The security bond is a binding pledge to pay the government if either you or your worker breaks the law, Work Permit conditions, or security bond conditions.
The security bond must be bought before your worker arrives in Singapore so that it takes effect when they arrive here. You must also get your insurer to send the details of the security bond to MOM, which takes up to three working days.
If the above steps are not taken, your migrant worker will be refused entry into Singapore and you will have to pay for the worker to be sent home immediately.
The security bond will usually be released one week after the worker’s employment is over and they leave Singapore, as long as neither you nor the worker broke any rules.
#3 Purchase Medical Insurance For Migrant Workers
If you are hiring migrant workers under the S Pass or WP, you must buy and maintain medical insurance coverage for each worker that you employ. Though the current coverage is set at at least $15,000 per year, the mandatory medical insurance coverage will be enhanced by the end of 2022 to include an annual claim limit of up to at least $60,000 and an age-differentiated premium.
The insurance should cover inpatient care and day surgery, including hospital bills for conditions that may not be work related. Furthermore, you could have a co-payment arrangement with the migrant worker so long as the amount is reasonable and does not exceed 10% of the worker’s monthly salary. The duration of the co-payment must also not exceed 6 months and must be explicitly stated in the employment contract or collective agreement that has the worker’s full consent.
If you’re hiring a migrant worker that stays in dormitories or works in the construction, marine shipyard or process (CMP) sectors, then you must also buy the Primary Care Plan (PCP). It covers most of the workers’ primary healthcare needs under a fixed scope of services. The PCP costs between $108 and $138 per worker per year.
You need to submit the worker’s medical insurance details online on WP Online before you request to issue or renew a WP. Otherwise, you should also update when there’s a change in details such as the name of the insurer, insurance policy number, insurance policy commencement, and expiry date.
Read Also: What Employers Need To Know About The Mandatory Primary Care Plan (PCP) For Foreign Workers
#4 Ensure Proper Housing Provided For Migrant Workers
Employers must ensure they provide proper housing for their migrant workers on WP. There are various types of housing that you can choose to accommodate your workers, such as purpose-built dormitories (PBDs), factory-converted dormitories (FCDs), construction temporary quarters (CTQs), HDB flats, and private residential premises (PRPs). Whichever option that you choose, you must carry out due diligence to ensure the requirements for the chosen property type are met.
You must also provide the workers’ residential addresses and mobile numbers to MOM. You can provide these details on the Online Foreign Workers Address Service portal using your Corppass before you apply for new or renewal work permit applications.
You would also have to update any change in your migrant workers’ residential address within 5 days.
#5 Pay Monthly Foreign Worker Levy
When you hire work permit or S Pass holders, you will need to pay a monthly foreign worker levy on time and in full. You can pay the levy either through a General Interbank Recurring Order (GIRO), which will be deducted on the 17th of each month, or by using PayNow QR by the 14th.
You can view the latest levy bill on the 6th of every month using the eservice provided by MOM.
If you don’t pay the full levy on time, you will be charged a late payment penalty of 2% per month or $20, whichever is higher, capped at 30% of the outstanding levy. You may also face possible cancellation of your existing WPs and not apply for new WPs.
Read Also: Foreign Worker Quota In Singapore: What Is It And How To Calculate It For Your Business
#6 Make Salary Payments On Time
As an employer, you must pay your migrant workers a fixed monthly salary that was declared to MOM when you applied for their S Pass or WP. The fixed monthly salary is comprised of the basic salary component and the fixed monthly allowances. This excludes variable payments such as overtime payment, in-kind payments, any form of reimbursements, and productivity incentive payments.
Though you are not required to make Central Provident Fund (CPF) contributions to your migrant workers, you must pay their salaries no later than 7 days after the last day of that month.
You must also credit your migrant workers’ wages directly into their bank accounts if they stay in dormitories, or you could pay them in cash if they don’t. Regardless, you must keep a record of the monthly salary and be able to produce this record if requested.
Read Also: Hiring Foreign Employees In Singapore: Why Underpaying Or Over-Declaring Salaries Is Against The Law
#7 Cancel Work Permit When Migrant Worker’s Employment Ends
When your migrant worker’s employment is completed or the worker quits, you must cancel the worker’s work permit within one week of the worker’s last day of work or notice.
By then, you should also settle all outstanding employment issues, including salary payment. Moreover, it’s your responsibility to also bear the cost of repatriation, which includes the cost of buying the air ticket with check-in luggage allowance.
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