More Flexibility for Service Sector Businesses in Deployment and Upskilling of Foreign Manpower

1. At the Committee of Supply Debate on 14 March 2013, Acting Minister for Manpower Mr Tan Chuan-Jin announced two new enhancements made to the foreign manpower framework for the Services sector, in order to help businesses in this sector enhance productivity amidst the recently tightened foreign manpower policies.
2. To help firms better optimise their foreign workforce, the Ministry of Manpower (MOM) is implementing the Job Flexibility Scheme for businesses in the Services sector. Similarly in the Services sector, MOM is introducing a market-based skills framework that allows Work Permit Holders (WPHs) in the Services sector an additional route to qualify for the lower foreign worker levy applicable for skilled WPHs.
   
   Job Flexibility Scheme for Services Sector
3. From 1 July 2013, businesses in the Services sector can offer their Work Permit Holders (WPHs) the opportunity and flexibility to work across different job functions within the same firm. This will help them reduce the need for additional manpower, as well as better optimise and adjust the deployment of their staff according to the demands of their businesses. This move is in line with the Government’s efforts to help businesses boost productivity and become more manpower-lean while coping with labour constraints.
   
   
4. We urge companies who wish to adopt job flexibility for their WPHs to first conduct a holistic review of their work processes and assess how the scheme can be applied to enhance productivity. Employers should offer job flexibility opportunities to all employees (local and foreign) and seek their consent before placing them on this scheme. Firms should also ensure their staff are properly trained before being placed on multi-tasking work arrangements, and to share the productivity gains and benefits arising from the scheme with these employees. MOM, SNEF and NTUC are working together on a set of Tripartite guidelines for employers’ and unions’ reference to help companies implement this responsibly, which will be released in due course.
   
   Market-Based Skills Framework for the Services Sector
5. The current skills framework for Work Permit Holders (WPHs) to upgrade from the ‘Unskilled’ (R2) to ‘Skilled’ (R1) status was first introduced to encourage employers to hire and retain skilled foreign workers. The levy rate for R1 WPHs is lower than that for R2 WPHs.
6. In addition to the current qualifications- and skills test-based criteria for a WPH to be considered skilled, MOM is introducing a market-based skills framework that allows WPHs in the Services sector to upgrade from R2 to R1 status.
7. From 1 Jul 2013, WPHs in the Services sector will also be granted R1 status if they meet the following conditions:
   
   a) Earn a fixed monthly salary (including fixed allowances) of at least $1,600;
   
   AND
   
   b) Have least 4 years of working experience in Singapore
8. With this change, more WPHs working in the Services sector can now qualify for the R1 status. This also translates to Services companies being able to benefit from savings in the foreign worker levies they are paying, since the levy rates for skilled Services workers are lower than those for the unskilled, and have been frozen from Jul 2013 to Jul 2015, while the levies for unskilled workers will increase. Please refer to Annex A for the schedule of announced levy rates for the Services sector.
   
   
9. This additional pathway will supplement the current skills upgrading framework under which a WPH can qualify for a R1 status. Employers are encouraged to continue to invest in developing their employees, whether local or foreign, through constant training and upskilling. This is one of the ways to allow their staff to upgrade their capabilities, progress in their careers and earn better wages. Companies will benefit too, through improved work performances from their employees, which will help boost productivity growth and lead to reduced manpower requirements in the long run.

Annex A - Overview of Foreign Worker Levy Rates In Services Sector

¹Please refer to the MOM website (http://www.mom.gov.sg/foreign-manpower/passes-visas/work-permit-fw/before-you-apply/Pages/levy-concessions-for-skilled-workers.aspx) for the current criteria for Work Permit holders to be qualified as ‘skilled’.