Publications

INTRODUCTION

Singapore has a population of close to 4.5 million and a labor force of approximately 2.2 million. The countrys economy remains strong and in 2004, boasted an 8.1 percent increase in GDP. Singapores highly-developed economy and central location to other countries in Asia has led many foreign companies to choose Singapore as their Asia hub.

The Ministry of Manpower (MOM) is responsible for maintaining a globally competitive workforce in Singapore. Therefore, the MOM is constantly striving to improve working conditions and benefits for all employees in Singapore by managing such areas as labor relations, occupational health and safety, foreign workers rights and on-the-job training programs.

FOREIGN WORKERS

Hiring Regulations

Effective July 1, 2005, two MOM regulations related to the hiring of foreign workers have been amended. The changes will affect the percentage of foreign workers allowed to be employed by companies in Singapore and will also increase the skilled foreign worker levy.

Citing economic recovery as its motive, the MOM announced that the skilled foreign worker levy will be progressively raised over the next year, with the first increase taking effect on July 1, 2005. This increase will raise the levy from its current level of $50 to $80 per skilled foreign worker. On July 1, 2006 the levy will increase once more to $100. This levy applies to all skilled foreign workers across all sectors of the economy.

The MOM also started raising the Dependency Ceiling (DC) the percentage of work permit holders that are allowed to be employed by a company as part of their total workforce on July 1, 2005. The DC was raised to 60 percent for the manufacturing sector and to 40 percent for the service sector. The previous DCs were set at 50 percent for manufacturing and 30 percent for services.

S Pass Work Permit

Prior to July 2004, foreign professionals and executives were issued P1, P2, Q1 or Q2 permits in order to work in Singapore; foreign semi-skilled and unskilled workers were granted R1 or R2 passes. However, on July 1, 2004, the Ministry of Manpower (MOM) changed the work permit system, replacing the Q2 pass with a new S pass. The S pass is a work permit for mid-level workers and will help Singapore fill its gap between foreign executives and unskilled workers. S pass applicants must earn a salary of at least S$1,800 (US $1,100) per month, though there are no restrictions on nationality, age or duration of employment in Singapore.

S pass applicants will be assessed on four points: salary, education, job type and years of work experience. S$1,800 (US $1,100) per month is considered the base salary and does not include payments such as overtime, incentives, bonuses or housing and travel allowances. The MOM will also evaluate the applicants qualifications, such as degrees received and specialized courses taken in their field. The applicants desired job type professional, technical or specialist will also be considered.

The application for the S pass requires the following forms and information: (1) S pass application form, (2) a copy of all educational documents and past employment testimonials, (3) a passport-size photo, (4) copy of the travel document page showing the applicants personal particulars, (5) professional certificate of registration (for those who are doctors, nurses, dentists, teachers, lawyers, etc.). The processing time for an S pass is approximately three weeks; the outcome will be mailed to the employer. Once the S pass is granted, it is initially valid for two years with each renewal to be valid for three years. The S pass holder will be required to pay a monthly fee of S$50 (US $30). S pass holders who earn a minimum of S$2,500 (US $1,500) will be eligible to receive dependent privileges and can bring their immediate family to Singapore.

Foreign workers who currently hold a Q2 pass are not required to convert to an S pass, as they will automatically be issued an S pass when their Q2 pass expires as long as they remain with their current employer. However, if the Q2 pass holder earns over S$2,500 (US $1,500), they may wish to go ahead and convert to an S pass in order for their dependents to receive the special privileges.

 

JOB TRAINING

Certified Training Course in Workplace Health Promotion

The Health Promotion Board (HPB), established in 2001, is focused on national health promotion and disease prevention programs in Singapore. In 2003, the HPB conducted a health promotion survey of nearly 600 organizations in Singapore. According to the results, over 25 percent of the organizations surveyed complained of having insufficient budgets to support a health promotion program and nearly half of the organizations admitted having inadequate experience in introducing and evaluating health promotion activities.

Following the outcome of the survey, the HPB announced the establishment of the Certified Training Course in Workplace Health Promotion (WHP). The new WHP program offers training sessions to help foreign and domestic companies increase productivity and improve employee performance, while reducing employee medical costs, absenteeism and turnover. The WHP program will provide training for employees, enabling them to gain the skills necessary to establish and manage a health promotion program within their company. Employees will have a variety of topics to choose from, including health screening, physical activity, smoking prevention, stress management and healthy eating.

Three different courses will be offered under the WHP program. The first course is WHP for Health Activists, which is geared towards employees who will help organize and promote specific activities. This course is 1 days long and teaches basic concepts of WHP and how to implement and market a particular program. The second course, which lasts 2 days, is WHP for Managers, and caters to those who will implement, plan and manage a WHP program. The third course, WHP for Consultants, is a 4-day course offered to consultants who will eventually be the trainers for Courses I and II. This course will provide a comprehensive understanding of the WHP curriculum and identify areas where companies often need more supportive health programs.

Work-Life Works Fund

On August 22, 2004, the Singapore government established the Work-Life Works (WOW) Fund to improve the work-life strategy in Singapore. The work-life strategy consists of activities and policies used by employers, which includes flexible working hours, employee support schemes and family care leave, to harmonize the time and energy a worker spends at work versus home. Businesses also benefit from this program through the increased productivity of employees, lower rates of absenteeism and better motivated and satisfied workers. The WOW Fund will help companies lower their costs of starting or improving work-life strategies by providing up to 70 percent of the costs associated with establishing new projects, up to S$30,000 (US$17,500) per project.

All private sector organizations, including non-profit organizations, may apply for WOW grants, regardless of their industry or size. However, projects which introduce flexible work schedules will receive higher priority, as these programs have been very successful in improving work-life harmony among employees in the past. WOW grants will cover the following programs: (1) training HR managers and line supervisors on work-life strategies through Ministry of Manpower (MOM) approved courses, (2) one-time infrastructural costs to implement network systems or support schemes to setup and maintain flexible work schedules and family care, (3) contracting a work-life consultant approved by the MOM and (4) hiring staff to implement or lead work-life programs within an organization. Conversely, a grant may not support personal wellness, such as gym memberships or recurrent costs for work-life programs such as computer maintenance or reimbursement of goods and services tax (GST).

Companies interested in applying for a grant must submit an application, work-life project proposal and a funds-allotment statement to the Quality Workplaces Promotion Department of the MOM. Organizations must also designate a senior level manager who will be responsible for, and committed to, the success of the project. Applications may be submitted at any time and applicants will be notified of the outcome of their proposal within 14 working days. Upon receiving approval, the organization will receive the first 30 percent of their grant. However, successful organizations will still need to obtain permission from the MOM prior to actually initiating the project. Once the project has begun, the organization will have one year to complete the project. They must also submit a progress report within six months of the starting date, or half way through the project, whichever is sooner. When the project has been successfully completed, a final report must be submitted to the MOM and the organization will receive the remaining 70 percent of their grant.

 

CHILDCARE

The Singaporean government is becoming increasingly concerned over the countrys declining birthrate, which dropped to a mere 1.05 at the beginning of 2005. To address this issue, the government has announced a number of new schemes aimed at promoting parenthood and improving family life in Singapore.

Parenthood Tax Rebate

The Parenthood Tax Rebate (PTR), to replace the Special Tax Rebate (STR), will reduce the requirements and qualifications parents need to meet in order to receive financial support for raising children in Singapore. The PTR will allow a mother to claim a S$10,000 (US$5,900) tax rebate on her second child, regardless of the mothers current age. Previously, the tax rebate varied depending on the mothers age, but the mother had to be under 31 years old in order to receive any rebate at all. Second, under the STR, a parent had to claim the tax rebate within nine years of childbirth. The new PTR Program does not have a time limit for claiming tax rebates.

Working Mothers Child Relief Program

Under the Working Mothers Child Relief Program (WMCR), mothers will continue to receive a percentage of their salary in the form of a tax relief, somewhere between five and 25 percent. The percentage will depend on the total number of children the mother has, but will no longer vary depending on a childs age (under 12 years old versus over 12 years old). The WMCR replaces the Enhanced Child Relief Program and the Further Tax Rebate Program.

Updated Children Development Co-Savings Act

After October 1, 2004, working mothers in Singapore were permitted to take up to 12 weeks of maternity leave, according to the improved Children Development Co-Savings Act. For a mothers first and second child, the employer is required to pay for the first eight weeks of maternity leave and the government will reimburse the employer for the final four weeks. If the employee has a third or fourth child, the government reimburses the employer for all 12 weeks of maternity leave. The reimbursement will be capped at S$10,000 (US$5,900) per four weeks. In addition, if the employer agrees, the mother may take her last four weeks of leave any time during the six month period after childbirth. Otherwise, the final four weeks of leave must be used continuously after the first eight weeks. Any mother who gave birth after August 1, 2004 is eligible for this extended maternity leave.

Childcare Centers

In an effort to provide working parents with more childcare options, the Ministry of Community Development and Sports (MCDS) has announced plans to increase the number of infant and childcare facilities to 3,000 by 2009. Currently, there are about 670 childcare centers in Singapore, with only 25 centers offering infant care services. The MCDS is hoping that these new measures will alleviate some of the burden on working parents who are seeking professional care providers for their infants and children during the workday.

In a marriage and parenthood survey conducted by the MCDS between July 2003 and February 2004, the majority of the 6,000 Singaporeans surveyed prefer to use childcare centers rather than in-home childcare workers. Additionally, the majority of respondents also prefer that child care centers be close to their homes, rather than close to their workplace. This preference contrasts with working parents in Japan, where the majority of working parents prefer to take their child to a daycare center at their place of work, leading more and more Japanese companies to invest in on-site child care centers.

HEALTH INSURANCE

In Singapore, both the government and private sector provide healthcare services. While public healthcare services are generally used by lower-income citizens, they also help to set the standards for the private sector services. The government healthcare programs in Singapore include the Medisave, Medishield, ElderShield and Medifund programs.

In 1990, the Medishield program was set up as a practical and affordable catastrophic medical insurance scheme to pay for large hospital bills. Fees such as ward charges, medication, surgical procedures and chemotherapy are covered under the scheme. Citizens and permanent residents of Singapore who are under 75 years of age are eligible to enroll.

But recently, the countrys rising healthcare costs have been placing a strain on the government and are forcing policyholders to pay increasing percentages of their hospital bills. In order to relieve this burden and recalibrate MediShield to apply only to catastrophic medical bills, the Ministry of Health (MOH) implemented several important changes to the existing policy.

The new reforms, effective July 1, 2005, reduce the burden of effective co-payments from 60 percent to 30 percent. In order to achieve this reduction, the MediShield payouts will be raised substantially. Lifetime, annual, daily and surgical claim limits will all be increased to a large extent. In addition, for amounts above S$5,000 (USD$3,050), the co-insurance rate will be reduced from 20 percent to 10 percent.

In turn, the MOH was forced to raise the cost of premiums. Due to premium adjustments being actuarially based, the elderly, as they are more likely to submit a claim, bear higher premium raises than younger policyholders. Premiums were raised by about S$10 (USD$6.10) per month for the elderly, and by S$4 (USD$2.44) per month for those below 50 years of age. In order to make sure that MediShield is only used by policyholders for catastrophic medical bills, the MOH also raised MediShield deductibles by S$500 (USD$305) for both Class B2 and Class C wards. The MOH believes that higher deductibles will not present a problem as average Medisave balances are currently about S$10,600 (USD$6,466).

Although MediShield is not a mandatory insurance scheme, it has achieved widespread coverage in Singapore. Nearly 90 percent of the working population is insured under MediShield or MediShield-equivalent programs.

WORKPLACE SAFETY

Following several occurrences of serious on-the-job accidents in the beginning of 2005, the Singaporean government has announced that a new law governing workplace safety will be introduced by the end of this year. The new act, named the Workplace Safety and Health Act, will replace the existing Factories Act and will aim to halve the occupational fatality rate by 2015.

The Workplace Safety and Health Act will set higher penalties for poor safety management and will also strengthen personal accountability of key personnel. The new framework intends to reduce safety risks at their source by punishing companies for poor management before accidents occur. In order to coordinate this new framework, the Workplace Safety and Health Council will be set up.

The Workplace Safety and Health Council will be responsible for establishing and updating health and safety standards in each industry, and will require periodic safety reports to be submitted. Even before projects can start, a health and safety plan with specific goals and targets will be required to be submitted for review. In addition, the number of required safety officers will be increased and they will also be given more authority, including the ability to issue stop-work orders. Training and evaluating workers on safety procedures and standards will also become mandatory.

The government has stated that the current Factories Act is too specific in its regulations, which has led to an environment where companies do not address safety issues outside of what is in law. The Workplace Safety and Health Act will introduce broader goals and liabilities in order to push companies to create safety procedures tailored to their own specific situations.

RETIREMENT

Under Singapores Retirement Age Act, the minimum retirement age is set at 62 years old. However, as Singapore faces an aging population and rising health care costs, the government is considering the possibility of increasing the retirement age. The National Trades Union Congress (NTUC) responded to the proposal by stating that simply raising the legal age of retirement would be largely ineffective. The NTUC argues that there are already many older workers dropping out of the job market before the age of 62, so the effective retirement age is already lower than 62 years old. The NTUC fears that a hike in the legal retirement age may not significantly increase the number of older workers and may encourage others to work longer than is appropriate. Employers have added that the proposal would be an imposition on businesses and would reduce their competitive edge.

The NTUC has instead suggested that Singapore concentrate its efforts on alleviating the problem of structural unemployment of older workers. It will be launching a national campaign on job redesign to encourage employment beyond 62 and has already set up pilot schemes to create individual training accounts for workers. The NTUC has suggested that another practical measure to facilitate the employment of older workers would be flexible work arrangements, allowing older employees to remain with one company while their responsibilities gradually tail off until retirement.

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