S Pass Quota for Manufacturing Sector to be Reduced in 2022

The situation

Singapore’s Ministry of Manpower has announced that the foreign worker quota for S Pass workers in the manufacturing sector will be cut in a phased approach, the first in January 2022 from 20% to 18%, and subsequently in January 2023, to 15%.

A closer look

Once the new quotas take effect, companies may retain foreign workers in excess of the quota until the expiry of their S Passes.

Impact

Existing S Pass holders in the manufacturing sector may not be able to renew their passes if their company exceeds the quota.

Employers in the manufacturing sector should hire more local workers so the company can retain its existing S Pass holders when the quota reductions take effect.

Background

• Increasing requirements for S Pass applicants. The S Pass is available to mid-level skilled foreign workers who do not fall into the Employment Pass category for professionals, managers and executives, and is issued for up to two years initially. Recently, the minimum salary level for S Pass applicants was increased to at least SGD 2,500.
• Protection of the Singapore labor market through reduction of quotas. Singapore imposes quotas that restrict the number of foreign workers an employer may hire under the S Pass and Work Permit categories as a way of protecting the local workforce. The S Pass quota has been progressively cut since July 2012, when it was reduced from 25% to 20% across all five sectors of the Singaporean economy (manufacturing, construction, marine shipyard, process, and services). Most recently, the S Pass quota was cut to 10% for the services sector and cut to 18% for the construction, marine shipyard and process sectors. These cuts show the government’s intention to continue strong protections of local workers, especially important for the country’s recovery following the economic decline due to COVID-19.

 

Looking ahead

It is possible that the Singapore government will continue to reduce S Pass quotas for the manufacturing, services, construction, process and marine shipyard sectors to promote the employment of Singaporeans after the 2023 targets come into effect. However, it is unlikely to happen immediately and will come in phases across years.

Quota reductions are likely in other parts of the world to encourage the hiring of local workers as the post-COVID-19 global economic recovery process starts and continues.

This alert is for informational purposes only. If you have any questions, please contact the global immigration professional with whom you work at Fragomen or send an email to [email protected].