Employers Should Review Salaries of Self-Sponsored Employees Before Year-End Compliance Deadline

In anticipation of a significant increase in the minimum salary for employees holding Personalized Employment Passes (PEP), employers should begin reviewing the salaries of affected employees and evaluating options for those who do not meet the minimum. Effective December 31, the minimum PEP salary will increase fourfold to SGD 144,000, from SGD 34,000. 

The PEP is a self-sponsored form of work authorization that is not tied to any specific employer. It is issued only once for a non-renewable three-year period. PEP holders may generally work for any employer and can remain in Singapore for up to six months in between jobs to evaluate new employment opportunities. 

Who Is Subject to New Salary Requirements? 

As previously reported, most individuals who obtained a PEP before December 1, 2012 must earn a fixed annual salary of at least SGD 144,000 in order to maintain their PEP status after December 31, 2014. Affected PEP holders who are unable to meet the increased salary requirement will need to change to a different immigration status, such as permanent residence or a company-sponsored employment pass, before December 31 to continue working and residing in Singapore. 

The SGD 144,000 salary threshold already applies to individuals who obtained a PEP after December 1, 2012. There is no change for these PEP holders. 

For PEP holders who are unlikely to meet the SGD 144,000 salary requirement, arrangements should be made to obtain permanent residence or employment passes before December 31. Employers should avoid last-minute filings at year-end when employees and their families would usually take leave for the holidays. 

Exemption from the Salary Requirement 

PEP holders who obtained a PEP before December 1, 2012 are exempt from the increased salary requirements if their passes will expire between January 1, 2015 and June 30, 2015. These PEP holders will be allowed to stay in Singapore until their PEP expires, provided they continue to meet the eligibility criteria under which their pass was issued. 

Employers should ensure that these PEP holders will continue to meet the requirements that applied when their pass was issued. If these employees will continue working for the company beyond their PEP expiry date, then steps must be taken to apply for company-sponsored employment passes for them. 

Dependents of PEP Holders 

Dependents of current PEP holders will be allowed to stay in Singapore as long as their sponsor’s pass is valid and they entered Singapore on or before December 1, 2012. 

What This Means for Employers and Foreign Nationals 

Because PEP holders obtain their passes without employer sponsorship, it may be difficult to distinguish them from employment pass holders and permanent residents. Employers may need to update their records before they can identify affected PEP employees. Salary records for intracompany transferees may also need to be updated to identify PEP holders and enable a full review. 

How Fragomen Can Assist 

Fragomen is working with clients to develop strategies for affected PEP holders. Fragomen can assist clients with evaluating salary levels for compliance with PEP rules and can suggest appropriate options for individuals who may not meet the income requirements by the end of the year. Fragomen also assists companies with preparing and filing employment pass and permanent residence applications. 

This alert is for informational purposes only. If you have any questions, please do not hesitate to contact the global immigration professional with whom you work at Fragomen or send an email to [email protected]. 

© 2009 - 2015 © Fragomen, Del Rey, Bernsen & Loewy, LLP, Fragomen Global LLP and affiliates. All Rights Reserved.