New policy changes will provide businesses with greater flexibility while expanding workforce sources and job roles.
In a major shift to its employment policies, Singapore will remove the maximum employment period for work permit holders starting from 1 July. At the same time, the upper age limit for these workers will be raised from 60 to 63, aligning with the country’s local retirement age.
Currently, the duration of employment for foreign workers varies between 14 and 26 years depending on sector, skill level, and country of origin. The removal of this restriction brings workers from all countries in line with those from Malaysia, Hong Kong, Macau, South Korea, and Taiwan, who already face no limits on their employment period.
Additionally, the age limit for new work permit applicants will be raised from 50 to 61 for non-Malaysians, and from 58 to 61 for Malaysians. These measures, announced as part of the Ministry of Manpower’s (MOM) budget plans for the upcoming financial year, aim to help businesses retain experienced workers while managing growing labour demands.
Manpower Minister Tan See Leng emphasised that allowing firms to retain skilled employees would enhance workforce stability. However, employers must also consider the higher health insurance costs associated with older workers.
As of June 2024, Singapore had a record-high 442,900 work permit holders in the construction, marine shipyard, and process industries, exceeding pre-pandemic numbers by 17 per cent. Addressing concerns about foreign employment, Dr Tan stressed that restricting foreign labour could lead to job losses rather than job gains, as many companies rely on a mix of local and international talent to operate in Singapore.
Expansion of Workforce Sources and Job Roles
To further address workforce needs, MOM will broaden its list of non-traditional labour sources for the manufacturing and services sectors. From 1 June, Bhutan, Cambodia, and Laos will join Bangladesh, India, Myanmar, the Philippines, Sri Lanka, and Thailand on this list.
Additionally, from 1 September, foreign workers from these non-traditional sources will be allowed to take on a wider range of jobs, including roles as cooks, heavy vehicle drivers, and manufacturing operators. Currently, only nine occupations are covered under this scheme, including Indian restaurant cooks, hotel housekeepers, and specific manufacturing jobs.
Singapore traditionally relies on Malaysia, China, and parts of North Asia for its labour needs in these sectors. The non-traditional sources programme, first introduced in 2023, was designed to help fill roles with significant manpower shortages that are difficult to automate and have low take-up rates among locals.
Firms hiring workers from these sources must offer a minimum monthly salary of S$2,000 and maintain a sub-dependency ratio of no more than 8 per cent for these employees, ensuring controlled reliance on foreign labour while safeguarding local wages.
Adjustments to S Pass and Manpower Policies
The government is also adjusting its S Pass policies, which apply to skilled migrant workers in specialised roles. From 1 September, the minimum salary for new S Pass applicants will rise from S$3,150 to S$3,300, while those in financial services will see an increase from S$3,650 to S$3,800. The qualifying salary will continue to rise with age, reaching up to S$5,650 for senior professionals in financial services.
To help companies transition, MOM will implement these salary increases in phases, with renewal applications only subject to the new requirements from 1 September 2026. The levy for S Pass holders in Tier 1, which covers up to 10 per cent of a company’s workforce, will increase from S$550 to S$650, aligning with the Tier 2 levy for firms with a higher foreign worker proportion.
MOM also provided updates on the Complementarity Assessment Framework (COMPASS), a points-based system used to evaluate Employment Pass applications. Early data suggests that firms are reducing dependence on foreign workers of a single nationality, and those that have adapted have created 4,000 additional jobs for local professionals, managers, executives, and technicians (PMETs).
Enhancements to Strategic Manpower Scheme
The Manpower for Strategic Economic Priorities (M-SEP) scheme, which supports firms looking to expand while hiring more foreign workers, will see an extension of its support period from two years to three years from 1 May.
To qualify, firms must contribute to key economic priorities such as innovation, internationalisation, or investment in Singapore’s hub strategy. They must also demonstrate commitment to local workforce development by increasing local hiring, providing training that enhances job roles, or participating in qualifying industry programmes.
From May, a new qualifying pathway will allow firms that send local employees for overseas exposure or leadership development programmes to benefit from the scheme. MOM will also expand the list of eligible training programmes under the scheme.
These changes reflect Singapore’s continued efforts to balance workforce flexibility with local employment safeguards, ensuring sustainable economic growth in the face of an ageing workforce and evolving business needs.
