The government has been actively aiding the Construction and Process sectors during the ongoing COVID-19 pandemic. Notably, to assist firms grappling with increased manpower costs due to limited worker inflow, foreign worker levy rebates of $250 per Work Permit holder (WPH) have been implemented in these sectors. Recognizing the acute worker shortages, immediate measures are being taken to augment the influx of new workers and facilitate the return of existing ones.
However, the consistent disruptions to manpower inflows over the past two years underscore the imperative for the Construction and Process sectors to intensify efforts in productivity enhancements, striving for a more manpower-efficient approach. This strategic move will fortify firms in these sectors, rendering them more resilient against potential future disruptions.
In collaboration, the Ministry of Manpower (MOM), Building and Construction Authority (BCA), Economic Development Board (EDB), and Enterprise Singapore (ESG) are instituting policy changes tailored for the Construction and Process sectors. These modifications aim to support the sectors’ transformation agenda and encourage the hiring of higher-skilled foreign workers. The key policy changes include:
1. Reduction in DRC (Dependency Ratio Ceiling):
– From 1:7 (1 local employee to 7 WPHs or S Pass holders) to 1:5 (1 local employee to 5 WPHs or S Pass holders).
2. Phase-out of MYE Framework:
– The MYE (Man-Year Entitlement) framework, an allocation system for WPHs from Non-Traditional Sources (NTS) and the People’s Republic of China (PRC), will be phased out.
3. Levy Structure Revision for WPHs:
*Note: The MYE framework involves an allocation system for WPHs from Non-Traditional Sources (NTS) and the People’s Republic of China (PRC). Firms exceeding their MYE quotas will face a higher levy rate (on the MYE-waiver tier).
Firms will have an adjustment period, with these policy changes taking effect from January 1, 2024. Firms surpassing the revised DRC of 1:5 on this date can maintain their existing WPHs and S Pass holders until the expiration of their work passes. However, they will not be eligible to renew or apply for new WPHs or S Pass holders until aligning their workforce within the DRC of 1:5.
Until December 31, 2023, firms can continue to apply for and utilize their MYE quotas. Project contracts awarded or with tender calling dates on or before February 18, 2022, will have the flexibility to leverage their MYE quotas until December 31, 2024, or their project completion date, whichever is earlier.
If you have any company-related queries, you may email us at [email protected]. When in doubt, seek legal advice or consult an experienced licensed Employment Agency with the Ministry of Manpower.
The editorial team at Singapore Employment Agency
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