The Ministry of Manpower yesterday (July 26) announced that the Minimum Wage for Employment Pass (EP) visa holders will be raised by 9.1% to S$3,600 a month. Foreigners employed currently employed as EP visa holders will see a pay raise when their 3-year employment contracts get renewed.
Ministry of Manpower: “With effect from Jan 1, 2017, only new EP applicants who can command a monthly salary of S$3,600 or more, subject to meeting other criteria on qualifications and experience, will be considered.”
While it is a jail-able offence to pay below Minimum Wage for foreigners in Singapore, Singaporean professionals, managers and engineers in Singapore are not given similar rights. The lack of a Minimum Wage for Singaporeans resulted in widespread depression of salaries especially in small and medium entreprises (SMEs) in the private sector. A Minimum Wage is applicable only for foreigners under various employer-sponsored visas – S-Pass, E-Pass and work permit. Although there is a S$1,100 “wage guide” for Singaporean low income earners working as cleaners and security guards, there is no offence to not follow the “guide”.
The Association of SMEs complained that this increase is too much, reduce productivity and that businesses should be given at least 3 years to adjust.
Eric Tan, an ASME Council Member: “Multinational companies have greater bandwidth and are less sensitive to increase in wages. Whereas for local, it can have a very serious impact, especially with that fact that now, economic growth is only less than two per cent. With this increase – it’s about eight per cent – that’s a big blow.”
The rise in the qualifying salary will have a “big impact” on productivity, and that businesses will take about three to four years to adjust to the changes.”