Wednesday, Feb 25, 2015
THE STRAITS TIMESTOP NEWS
Foreign worker levy hike deferred for a year
Additional adjustments made for manufacturing, construction firms
Published on Feb 24, 2015 2:45 AM
By Chia Yan Min
LEVY hikes for firms employing foreign workers have been deferred for 12 months.
The move will give companies more breathing space as they battle a tight labour market and rising wage costs.
The higher levies for S Pass and work permit holders in all sectors were to kick in from July this year but will now be deferred until July next year, with additional adjustments for manufacturing and construction firms.
Levy rates for work permit holders in manufacturing firms will be kept unchanged at current levels until June 2017.
There has been no increase in the number of work permit holders in manufacturing over the past year and the sector has been making good progress on productivity, said Deputy Prime Minister and Finance Minister Tharman Shanmugaratnam yesterday.
In another move, the levy rate for higher-skilled workers hired outside of a construction firm's man-year entitlement quotas will be lowered from July.
The man-year entitlement refers to the total number of foreign construction workers allocated to a contractor for a specific development. Construction firms are allocated a number of man-years required to complete a project and the number of foreign workers they can employ.
Levies for basic-skilled construction workers will be raised in July next year and again in 2017, while other levy rates for the sector will remain at current levels.
The move aims to encourage construction companies to upgrade workers and retain more productive, skilled employees.
These tweaks will give companies, especially small and medium-sized enterprises, more time to adapt to "the new normal of a permanently tight labour market, where it is both difficult to find Singaporean employees, and foreign workers are no longer an easy solution", said Mr Tharman.
But he stressed that while the Government is adjusting the pace of its foreign worker measures, it is "not changing direction".
"It remains crucial for Singapore that we restructure towards reducing our reliance on manpower, and find new and more innovative ways to do business."
The Singapore Manufacturing Federation welcomed the freeze in foreign worker levies. "This will provide more time for (manufacturers) to explore ways to transform through innovation."
Mr Leonard See, director of interior construction and specialised carpentry firm A&F Concepts, said the levy changes do not give him the incentive to send staff for training as doing so can be "risky" for small companies.
The firm has about 10 foreign workers, all classified as basic- skilled.
"To improve productivity, we keep our operations lean and emphasise on-the-job training and mentorship," said Mr See.
"There are other avenues to lower levies - if workers stay with me for a long time, I can move them up to a higher pay scale and also pay lower levies."
chiaym@sph.com.sg
The move will give companies more breathing space as they battle a tight labour market and rising wage costs.
The higher levies for S Pass and work permit holders in all sectors were to kick in from July this year but will now be deferred until July next year, with additional adjustments for manufacturing and construction firms.
Levy rates for work permit holders in manufacturing firms will be kept unchanged at current levels until June 2017.
There has been no increase in the number of work permit holders in manufacturing over the past year and the sector has been making good progress on productivity, said Deputy Prime Minister and Finance Minister Tharman Shanmugaratnam yesterday.
In another move, the levy rate for higher-skilled workers hired outside of a construction firm's man-year entitlement quotas will be lowered from July.
The man-year entitlement refers to the total number of foreign construction workers allocated to a contractor for a specific development. Construction firms are allocated a number of man-years required to complete a project and the number of foreign workers they can employ.
Levies for basic-skilled construction workers will be raised in July next year and again in 2017, while other levy rates for the sector will remain at current levels.
The move aims to encourage construction companies to upgrade workers and retain more productive, skilled employees.
These tweaks will give companies, especially small and medium-sized enterprises, more time to adapt to "the new normal of a permanently tight labour market, where it is both difficult to find Singaporean employees, and foreign workers are no longer an easy solution", said Mr Tharman.
But he stressed that while the Government is adjusting the pace of its foreign worker measures, it is "not changing direction".
"It remains crucial for Singapore that we restructure towards reducing our reliance on manpower, and find new and more innovative ways to do business."
The Singapore Manufacturing Federation welcomed the freeze in foreign worker levies. "This will provide more time for (manufacturers) to explore ways to transform through innovation."
Mr Leonard See, director of interior construction and specialised carpentry firm A&F Concepts, said the levy changes do not give him the incentive to send staff for training as doing so can be "risky" for small companies.
The firm has about 10 foreign workers, all classified as basic- skilled.
"To improve productivity, we keep our operations lean and emphasise on-the-job training and mentorship," said Mr See.
"There are other avenues to lower levies - if workers stay with me for a long time, I can move them up to a higher pay scale and also pay lower levies."
chiaym@sph.com.sg
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