Yearly pay limit raised to $144,000 from $34,000; period cut to 3 years
By Janice Heng, The Straits Times, 7 Nov 2012
FROM next month, foreign professionals seeking the top-tier Personalised Employment Pass (PEP) have to earn more than four times what they currently have to make in a year.
Their annual income has to be at least $144,000, a sharp rise from the current $34,000.
In addition, the duration of this pass, which cannot be renewed, will be shortened from five years to three years.
These changes, announced by the Ministry of Manpower (MOM) on its website last week, represent the latest move by the Government to tighten the inflow of foreign labour, a hot-button issue at the last general election.
The PEP lets foreigners work in Singapore without being tied to a specific employer. They can also stay for up to six months between jobs, compared with a month for Employment Pass (EP) holders.
EP holders making $34,000 or more a year can apply for the PEP after a minimum stay of a few years in Singapore.
But from Dec 1, PEP applicants must first hold a P1 pass - the highest kind of EP - and earn $144,000. Those on lower-level P2 and Q1 passes will no longer be eligible. Nor will former P1 pass holders.
Overseas-based foreign professionals applying for a PEP must have a last-drawn monthly pay of $18,000, up from $8,000. And existing PEP holders will lose their passes if they do not make the $144,000 annual income limit by the end of 2014. But those whose PEPs expire in the first half of 2015 can stay until the expiry date.
Those who lose their PEP can still work in Singapore on a regular Employment Pass or S-Pass, if they meet the criteria for those.
The MOM told The Straits Times yesterday that about one in three of the 12,000 PEP holders here can meet the new cut-off, based on current pay.
Mr Aasim Saeed, 34, is not among them. News of the changes shocked the IT manager of a chemical and pharmaceutical firm. "For those who still hold the pass, you cannot simply change the rules like that," he said.
The Pakistani national received his PEP in February, after three years here. It is set to expire in 2017. But his $6,000-plus salary is far from the new cut-off, and he does not expect it to double by the end of 2014.
"It's impossible," he said.
The MOM says the changes are "in line with (its) recent moves to raise the quality of EP holders". These "will also ensure that the PEP remains a premium pass for top-tier foreign talent working in Singapore."
EP qualifying salaries and educational criteria were raised in July last year and January this year.
Human resource experts, however, do not expect the latest move to affect many companies, saying Singapore remains very attractive to talent.
The 12,000 PEP holders represent about 7per cent of the 174,700 EP holders here.
"This comparatively small number suggests that many highly skilled foreign workers don't consider the PEP essential for working here," said Kelly Services vice-president and country general manager for Singapore Mark Hall.
Singapore Chinese Chamber of Commerce and Industry president Teo Siong Seng was less sanguine. "It's putting the barriers very high," he said.
He felt that continued efforts to tighten foreign labour inflows could make things harder for firms already facing a tough external environment.
"We know the feelings on the ground," he said, referring to public unhappiness over high foreign worker numbers. "I just wonder whether the Government is over-reacting."
Stricter PEP rules may benefit bosses
Foreign talent holding personalised work pass may stay put, say experts
By Janice Heng, The Straits Times, 7 Nov 2012
TIGHTENING the criteria for the premium Personalised Employment Pass (PEP) could be a boon to employers if it encourages foreign talent to stay put, say human resource experts.
Unlike other work passes, the PEP lets foreigners work in Singapore without being tied to one employer. They can also spend up to six months between jobs, compared to just one month for regular Employment Pass (EP) holders.
But with PEPs becoming harder to get, "professionals would actually be more compelled to stay in companies" rather than try to move from an EP to a PEP, said Robert Walters Singapore manager of banking finance Finian Toh.
From next month, PEP applicants must earn at least $144,000 a year, up from the current $34,000. And the non-renewable pass will be valid for three years, down from the current five.
The Ministry of Manpower (MOM) estimates that a third of the 12,000 PEP holders today can make the higher cut. Those whose PEPs expire by end-June 2015 can also keep them until they expire.
But others who cannot meet the new requirement by end-2014 will lose their PEPs - though they can still work here on regular EPs or S-Passes. This is a worry for such PEP holders, who like the flexibility the pass affords.
It also makes the hiring process smoother, said a Malaysian PEP holder in the IT industry, who declined to be named. With a tighter foreign worker policy, employers may balk at having to apply for a new EP, given the uncertainty of whether it will be granted.
"But with the PEP, I can tell employers that I can always start work next week," she said.
However, some employers might heave a sigh of relief. Keeping their current job would be "of top concern" to PEP holders who might lose the pass, said Mr Toh. And "since obtaining a PEP is now more stringent, few would want to go through the hassle of applying for one", he added, reducing the number of would-be free agents.
Nor does the change necessarily mean talent will be lost. Top executives are likely to meet the new criteria, and skilled workers who do not can still be hired on EPs, noted Randstad director of professionals Richard Farmer.
If there is a downside for firms, it is that taking on skilled contract workers might be harder, said Kelly Services vice-president and Singapore country general manager Mark Hall. PEP holders are especially suited for such jobs as they can start work immediately.
Still, the move should meet the MOM's stated goal of ensuring the PEP remains premium, said Singapore Human Resources Institute executive director David Ang. "It must really be for just the very senior, very talented people."
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