Effective July 1, the Singaporean Ministry of Manpower (MOM) will increase the minimum salary that Singaporean companies must pay local workers in order for them to be counted when calculating the local-to-foreign quota imposed on the hiring of foreign workers.The current minimum salary threshold for local workers is SGD 1,000 per month and will rise to SGD 1,100 per month on July 1.

Maximum quotas on foreign workers

The MOM sets maximum quotas on the number of foreign workers a company may sponsor for passes and work permits based on the number of local workers a company employs. If a local worker is paid less than the minimum salary threshold, that worker does not count toward the total local labour force in the MOM’s calculation.For example, a manufacturing company with 100 local employees under the MOM quota is permitted to employ 20 foreign employees with S Passes, 25 foreign employees with PRC Work Permits, and 150 foreign employees with NAS Work Permits. The intent of the rule is obviously to ensure employment for local workers; and as Pro-Link GLOBAL has reported before, the MOM has recently been increasing pressure on companies to employ more foreign workers. See the Immigration Dispatch of March 20 and white paper “Singapore Moves to Protect Its Own Labor Force” here.

Salary increase just 2.5 per cent per year

While the July 1 adjustment in the minimum threshold amounts to a ten percent increase, that minimum salary has not been increased since 2013. Viewed over the period of the past four years, the adjustment amounts to a mere 2.5 per cent annual increase – a rate just over local cost-of-living inflation and just under local wage inflation.In this light, the present action by MOM does not appear to be a significant tightening of the foreign worker job market at this point. However, note that the MOM has already scheduled an additional SGD 100 increase for these minimum salaries in July 2018. This immigration dispatch was prepared by Pro-Link GLOBAL Visa and Immigration Services.For related news and features, visit our Immigration section.Access hundreds of global services and suppliers in our Online Directory  Get access to our free Global Mobility Toolkit