Singapore: Local employment wage changes

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Currently, there is no minimum wage in Singapore. In its place, there is a Progressive Wage Model (PWM), which is a scheme developed to guarantee career and wage progression for workers limited to sectors like security, cleaning, and landscape. Essentially, workers in these specific sectors will be guaranteed progression based on their productivity and skills, which can be enhanced through government-subsidised courses. 

Therefore, the Progressive Wage Model aims to strike a balance for businesses to pay for labour for its worth, while providing opportunities for Singaporean citizens to secure basic capabilities and upskill when possible. The constant issue however, is that the PWM covers too few industries. 

Although there are no minimum wages for the rest of the sectors, there are changes enacted by the Singapore Government to support local employment during these times of crisis. Firstly, there are key changes to foreign work pass policies. Here’s a summary of the changes:

  • From September 2020, the minimum monthly salary for Employment Pass holders was raised from $3900 to $4500.
  • For EP holders in the financial sector, they are subjected to a higher minimum monthly salary of $5000.
  • For mid-skilled foreign workers on S passes, the qualifying salary is raised from $2400 to $2500.
  • These changes have been made for new applicants after September 2020 and will apply to renewal applicants beginning May 2021. 

On top of these changes to foreign work pass policies, there is also the Job Growth Incentive Scheme (JGI) to go hand in hand with the Job Support Scheme in helping expand local employment. Essentially, the JGI aims to support wages for 12 months from September 2020 to 2021, split into 2 phases. Phase 1 begins from September 2020 to February 2021, and phase 2 starts from March 2021 to September 2021. The eligibility criteria however, is that JGI only applies to companies that reflect an increase in overall local workforce size earning ≥$1,400/month. If eligible, the support covers:

  • 25% of the first $5000 of gross monthly salary paid to new local hires. (50% for mature local hires aged ≥40 years or persons with disabilities or ex-offenders)
  • This supportable gross monthly wage will increase to the first $6000 of gross monthly wages paid from March 2021, which is the 2nd phase of the JGI.
  • For mature local hires/persons with disabilities/ex-offenders, government support can be extended beyond the JGI for another 6 months

This article is written with reference from:

IRAS. (2021). IRAS | Jobs Growth Incentive (JGI). Retrieved June 21, 2021, from Iras.gov.sg website: https://www.iras.gov.sg/irashome/Schemes/Businesses/Jobs-Growth-Incentive–JGI-/