Under a microscope: Foreigners and firms face tougher scrutiny under new EP application policy

Applicants will now need to pass a points-based evaluation and meet a higher qualifying salary. 

Securing an employment pass (EP) in Singapore has always been "cumbersome," which is why it would not be surprising if firms—especially those looking to hire more foreigners for niche jobs—would have a negative reaction to the imposition of stricter rules for work permit applications. But according to Drew & Napier LLC's Co-Head of Employment, Kelvin Tan, the new rules hold several advantages for employers.

Tan told Singapore Business Review that there will be two main changes to EP applications: 1) an increase in the qualifying salaries which will be benchmarked to the top 33% of local professionals, managers, executives and technicians (PMET) by age; and 2) the introduction of the new points-based Complementarity Assessment (COMPASS) framework.

“Raising the qualifying salaries for EP applications goes towards ensuring that EP holders are comparable in quality to the top one-third of our local PMET workforce,” said Tan.

Changes in salary and evaluation

According to the Ministry of Manpower (MOM), the revised minimum qualifying salary for foreign workers for all sectors except financial services is $5,000, up from the previous $4,500. For the financial services sector, the minimum qualifying salary was raised to $5,500 from $5,000.

The revised rule on salaries will be applied to new EP applications from 1 September 2022 and EP renewals from 1 September 2023.

In terms of the evaluation, there will be objective criteria that determine how points are awarded to EP applications. Applicants will be required to get at least 40 points in order to pass.

"The new policy is designed to be a transparent system so that businesses and applicants will have a clearer idea as to whether they meet the criteria for obtaining an EP and have greater clarity and predictability for manpower planning," Tan said.

All the criteria in the COMPASS framework are "tradeable" and "none is a veto factor," explained Tan. This means that if the application garnered 0 points for firm-related attributes but got at least 40 for the individual attributes, the applicant still passes the COMPASS.

Businesses who score poorly on the assessment, however, still have to watch their backs, said Tan, adding that MOM is planning to re-purpose its Fair Consideration Framework (FCF) Watchlist, which "identities employers with indications of discriminatory hiring practices."

After COMPASS is fully rolled out, Tan said the watchlist will focus on the firms that scored poorly and help them strengthen their workforce profile, and adjust to the new framework.

Employers who are found to be in breach of the Tripartite Guidelines on Fair Employment Practices will be at the risk of being debarred from hiring foreign employees, even if foreign employee candidates pass the COMPASS framework, Tan added.

Better new policy

Apart from the two new changes, one of the main differences between the old and the new policy is the review of firms hiring foreign talent, Ng Zhao Yang, local principal in the employment practice of Baker McKenzie Wong & Leow, told Singapore Business Review.

The COMPASS framework, for example, now takes into consideration factors that relate to the employing company and not only with respect to the applicant's credentials.

"This means that the companies who wish to employ a foreigner will need to ensure that their own credentials are good. Therefore the COMPASS framework is the culmination of the MOM's efforts to amend the application process to take into account the employing company as well," Ng said.

READ MORE: Look locally: HR experts advise firms amidst stricter working permit system

The review of firms, particularly their attributes like nationality diversity, and local PMET share relative to industry peers, will also now be done "at the point of application for an EP," according to Tan.

"Under the current policy, firm-related attributes are considered subsequent to the determination of the foreign individual’s eligibility based on individual criteria, such as having a job offer, meeting the salary requirement, having acceptable qualifications or specialised skills, having regard to the MOM's FCF Watchlist," Tan explained.

Processes for passes

Applicants who fail to pass one of the two steps or both, need not fret as they, or their firm, have the right to appeal their unsuccessful application, according to Tan.

"The MOM gives reasons when it rejects an application and provides advice on what the applicant should do next. Appeals should only be made if they can address the issues raised in the rejection advisory," Tan added.

“But chances of success of appeals are less likely, unless there are new facts that come to light which allow for more points to be granted to push it beyond the threshold," according to Ng.

For parties who can no longer appeal or also failed to do so, Tan and Ng suggested securing other types of work passes like work permits for semi-skilled migrant workers; S Pass for mid-level skilled staff; EntrePass for eligible foreign entrepreneurs who are keen to start and operate a business in Singapore that is venture-backed or possess innovative technologies; and personalised employment pass for high-earning foreign professionals.

Ng, however, warned applicants that securing other passes, particularly the S Pass also "poses its own difficulties," like a quota.

Aligning labour policies

Whilst the new EP policy may be viewed just as an added burden to firms or foreign talents, Ng said the new EP application process helps to further the local government's goal of "ensuring that the right type of talent" can come to the Lion City to work "but at the same time espousing the importance of the Singapore core."

The additions to the policy, like the COMPASS point system, also allow for employers to "develop a strong Singaporean core and a diverse workforce by awarding points when an employer has a higher local PMET share as compared to its industry peers and when the employer seeks to bring in a foreign employee that would improve the diversity in the company," Tan said.

"The new policy for the grant of EPs is consistent with other labour policies in place in Singapore. Singapore’s foreign workforce policies are guided by the goals of a strong Singaporean core, complemented by a high-quality and diverse foreign workforce," Tan added.