Employment Pass: a small revolution with the introduction of the COMPASS points system

Confirming certain rumors of the last few months, the MOM (Minister of Manpower or the Ministry of Labour) announced on March 4 that a new points system called COMPASS (Complementarity Assessment Framework) would replace the current system governing the issuance of Employment Pass (“EP”). The requirement to post job vacancies on MycareersFuture.gov.sg will nevertheless remain in place.

This new system will come into effect from September 1, 2023 for new EP requests and from September 1, 2024 for renewal requests.

Even if this deadline may seem distant, it is recommended that all companies start preparing for it, in particular by making an inventory of EP holders and the nationalities represented within the company.

Minimum wages

These new features are in addition to the increase in the minimum wage for PE. As a reminder, the minimum threshold will take 500 SGD from September 1, 2022 (and September 1, 2023 for renewals), i.e.:

  • 5,000 SGD minimum instead of the current 4,500 SGD for all sectors;
  • 5,500 SGD minimum instead of the current 5,000 SGD for the financial services sector.

It should not be forgotten that these minimum wages are only valid for junior positions for candidates leaving their higher education, and can therefore more than double for experienced employees over 40 years of age.

What will this new points system consist of?

The new system is based on 4 fundamental criteria and 2 “bonus” criteria. In total, it will be necessary to collect 40 points to obtain the EP, which means that certain criteria make it possible to “catch up” with others (ie it is possible to obtain zero on a criterion without being disqualified).

These criteria are as follows:

Basic criteria

They are classified into 2 categories: those relating to the candidate and those relating to the company.

Individual criteria

This involves comparing the fixed monthly salary for the position with that of other employees (managers and technicians) in the same sector by age. Depending on the percentile, 0, 10 or 20 points will be awarded.

  • Criterion 2: qualifications

The diplomas will be classified in 3 categories: either a first category institution diploma (20 points), or a diploma benefiting from an equivalent to the British bachelor’s (10 points), or a diploma without equivalent (0 point).

Company-related criteria

  • Criterion 3: diversity

It will be analyzed whether the candidate’s nationality is already represented within the company.

If the share of citizens of the same nationality as the candidate is less than 5%, then 20 points will be awarded. If this share is between 5 and 25%, 10 points will be awarded. On the other hand, if this nationality already represents more than 25% of managerial and technical employees within the company, then no points will be awarded. Only employees earning at least 3,000 SGD will be considered for the evaluation of this criterion.

For companies employing fewer than 25 executives and technicians, 10 points will be awarded by default.

It is appropriate for companies to start analyzing the distribution by nationality (the nationality on the passport communicated during the EP application will be taken into account) as of today because this criterion will have indirect effects, each new hiring modifying the composition of the total workforce and being likely to have an impact on the renewal of an existing EP.

  • Criterion 4: support for local employment

To further encourage companies to favor local workers (Singaporean citizens and permanent residents), a high percentage of local employees within the company earns more points. The number of points is awarded according to the share of premises employed by the company compared to other companies in the same sub-sector. The MOM has announced that all businesses will be categorized by sector and sub-sector by September 2023 based on the primary business declared by the business to ACRA. It is therefore appropriate for companies to check whether the activity that has been declared is still relevant.

Here again, the same principle: only employees earning at least 3,000 SGD will be taken into account and 10 points will be automatically awarded to companies employing fewer than 25 employees.

Companies with a percentage of more than 70% local employees will automatically earn 10 points.

Criteria “ bonuses »

– Criterion 5: List of jobs in short supply

A list will be compiled of positions for which there is currently a shortage of candidates within the local population. This list will be announced in March 2023 and then regularly updated. As an example, MOM cited the position of an artificial intelligence engineer or cybersecurity specialist.

If the position for which an EP is requested is mentioned on this list, 20 bonus points will be awarded (reduced to 10 points, however, if the share of employees of the same nationality as the candidate is more than a third). If the candidate has not obtained an EP without this bonus criterion, then he will receive an EP exclusively for the designated position and any subsequent position changes must be notified to the MOM and the EP will be subject to re-evaluation.

  • Criterion 6: Strategic economic priorities

Innovative companies or companies developing international activities in partnership with the Singaporean government, likely to offer jobs to local employees, will be able to obtain 10 additional points. The criteria and application procedures to be part of this selection of companies will be announced in March 2023.

Will there be exceptions?

The following situations will be exempted from the objective of achieving 40 COMPASS points:

  • Monthly fixed salary of more than 20,000 SGD,
  • International intra-corporate transfer within the framework of the general agreement of the World Trade Organization relating to trade in services or any other general free trade agreement to which Singapore is a party,
  • Fixed term contract of 1 month or less.

It should be noted that these exemptions are the same as those currently permitting exemption from the obligation to publish a position available on MycareersFuture.gov.sg in order to obtain an EP. But beware ! The exception concerning companies with less than 10 employees has not been included for COMPASS. However, as we have seen, companies with less than 25 employees will receive certain points automatically. This will continue to support small businesses.

What are the objectives of this new system?

The objective is clear: it is a question of bringing more transparency and clarity to companies wishing to use a foreign workforce, the current system being criticized for its unpredictability. An online tool will allow companies to pre-check the score.

Moreover, and although the Ministry denies it, this system seems to constitute a new restriction on access to the precious sesame. Singapore thus confirms that foreign labor is only welcomed as a complement to the local workforce, in order to transmit to it skills that it does not yet have.

You can find the details of the measures on the MOM website here.

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Employment Pass: a small revolution with the introduction of the COMPASS points system

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