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Update on FCF and its Impact to Employers
| Dalia Wong

Update on FCF and its Impact to Employers

The implementation of the Fair Consideration Framework (FCF) now means that all employers must abide by certain requirements that are aimed at giving Singaporeans fair access to job opportunities. 

Introduced in August 2014, the mandatory job advertisement requirement promotes the hiring of Singaporean nationals. Employers are expected to advertise vacancies for positions paying less than SGD 12,000 per month in the official job bank which facilitates job matching between local individuals and employers. 

It is important to note that the FCF only affects the Employment Pass (EP) category, largely comprising professional, managerial and executive (PME) roles. 
Exemptions to the FCF 
There are a number of exemptions to the new system, including:
  • Positions paying above SGD 12,000 per month
  • Companies with 25 or fewer employees
  • Foreign nationals on short-term assignments not exceeding one month
  • Intracompany transferees who are in a manager, executive or specialist position and who have worked for the overseas firm for at least one year
  • Intracompany transferees 
Manager, Executive and Specialist roles have specific definitions when used in international treaties of which Singapore is a member. It is understood that these same definitions will be used to determine whether or not intracompany transferees are eligible for exemption from the advertising requirements. 
Whilst the Ministry of Manpower may still add further requirements or refine the definitions for their purposes, the current definitions are outlined below. However, the decision on whether an individual applicant falls under the definition ultimately resides with the Ministry, who may then require the position to be advertised, which is their preference. 
Managers are persons within an organization who:
  • Primarily direct the organization or one of its departments or sub-divisions
  • Supervise and control the work of other supervisory, professional or managerial employees
  • Have the authority to, or who can recommend, hiring, firing or other personnel actions, including promotion or leave authorization
  • Exercise discretionary authority over day-to-day operations
The definition of a manager does not include first-line supervisors, unless the employees supervised are professionals. Nor does it include employees who primarily perform tasks necessary for the provision of the service. 
Executives are persons within the organization who:
  • Primarily direct the management of the organization
  • Exercise wide latitude in decision-making
  • Receive only general supervision or direction from higher-level executives, the board of directors, or stockholders of the business
Executives would not directly perform tasks related to the actual provision of the service or services of the organization
Specialists are persons within an organization who:
  • Possess knowledge at an advanced level of expertise
  • Possess proprietary knowledge of the organization's service, research equipment, techniques or management
Specialists may include, but are not limited to, members of licensed professions. 
Key issues to be considered 
There are a number of important aspects regarding the hiring of employees that prospective employers need to bear in mind when working within the framework of the FCF. These include:
  • Whilst employers may meet all general requirements of the scheme, the approval of an EP remains discretionary with the Ministry of Manpower which may take other criteria into consideration.
  • When filing multiple EPs, unless stated in the number of vacancies in the job posting, companies must post a separate job posting in order to receive a further job ID.
  • A job vacancy must be advertised for at least 14 days before a company can file an EP application.
  • Differences in the occupation title, salary range or other relevant details from the job post may result in an EP not being granted.
  • Job posts cannot be edited after submission. Should changes be needed, a new job post must be made. This means that the clock will reset and employers must wait a further 14 calendar days from the new posting before the EP application can be filed.
  • If needed, an employer must ensure a foreign national’s EP application is filed within 3 months following the job posting closing date.
  • Employers are expected to adhere to deadlines when applying for EPs.
Employers who are in the process of hiring a foreign national need to abide by all requirements of the FCF. 
Even so, employers must recognize that successfully met requirements do not automatically guarantee the granting of an EP. Employers should always take careful and accurate steps to truthfully display the job posting information and to exactly mirror the same information in any EP application.