A Guide to Hiring Foreigners in Singapore

After you have incorporated a Singapore company, you will need to hire employees to work for your company. While hiring local staff is easy, you will need to meet a few obligations if you intend to employ foreign staff. This guide will provide you with an overview of the considerations which must be kept in mind before hiring foreigners in Singapore.

What you need to know before hiring foreigners in Singapore

In Singapore, the relationship between an employer and an employee is mainly regulated by their contract of service. Parties are free to contract how they see fit, and any disputes that arise between them must first be settled by reference to the contract’s written and/or implied conditions. The primary legislation governing the hiring, employing, and dismissing of both local and foreign workers is the Singapore Employment Act.

Contract of Service – Applicable to both local and foreign employees

The employer-employee relationship, as well as the terms and conditions of work, is defined by a contract of service (COS). Key employment terms (KETs) and vital elements, such as hours of work and job scope, must be included in the contract.

A COS is an agreement expressing:

• one person’s agreement to employ another as a staff and
• the other person’s agreement to serve as a staff to the employer.

A COS can be in writing, verbal, expressed, or implied. It can also be in the form of a letter of appointment or employment or an apprenticeship agreement. However, the contract should be in writing to minimize disputes on the agreed terms and conditions.

Employment Act – Applicable to both local and foreign employees

The Singapore Employment Act establishes the basic terms and conditions of employment, as well as the rights and obligations of employers and employees under a COS. The aim is to prevent unreasonable restraints and limitations on the parties involved. The Singapore government also guarantees that the Act, while adhering to international standards, gives enough protection to all parties involved in the employment process.

The Employment Act does not cover the following groups of workers:

• Domestic workers,
• Seafarers,
• Statutory board employees or civil servants,
• Professionals, managers, and executives (PMEs) whose basic monthly salaries (BMS) exceed $4,500

The Employment Act covers other employees under a COS, regardless of nationality, including:

• PMEs whose BMS is S$4,500 or less*
• Workmen (manual workers) whose BMS are S$4,500 or less 
• Other employees whose BMS are S$2,500 or less

* except for part IV of the EA, which provides protection for rest days, hours of work, and overtime.

Employment of Foreign Manpower Act – Applicable to all foreigners employed in Singapore

The employment of all foreigners in Singapore is regulated by the Employment of Foreign Manpower Act (EFMA). It prescribes the responsibilities and obligations for employing foreign employees in Singapore.

The Act covers regulations and enforcement for:

• Work passes, including Employment Pass, S Pass, and Work Permits
• Offenses

The EFMA also defines work pass responsibilities, such as applications, cancellations, medical insurance, levy, cancellation, and repatriation. Moreover, it gives covered foreign employees the right to receive:

• Salary
• Hours of work, overtime, and rest days
• Public holidays
• Annual leave
• Sick leave

Note: The EFMA provides for the well-being and entitlements of foreign domestic workers (FDWs). The Employment Act does not apply to FDWs.

According to the EFMA, the following are the punishments for common wrongdoings:

Work passes required for hiring foreigners in Singapore

According to the Employment Act, a foreigner must have a valid work visa to be able to work in Singapore. If you want to hire a foreigner, you’ll need to apply on their behalf for a legitimate work pass before they can start working for you. Please keep in mind that certain work passes impose a limit on the number of foreign workers you can hire.

The type of work pass that should be applied for depends on the foreign worker’s skill level, which is generally categorized as follows:

• Skilled professionals (e.g., software engineers, doctors, R&D specialists, etc.) 
• Semi-skilled professionals (e.g., technicians, chefs, administrative professionals, etc.)
• Unskilled professionals (e.g., construction workers, domestic help, etc.)

The following are work passes you will need to apply for depending on which category of foreign talent you intend to hire.

1. Work Permit

A Work Permit is the type of work visa meant for workers from approved source countries working in the construction, manufacturing, marine shipyard, process, or services sector. The requirements for this work visa vary by industry. Therefore, before applying for a Work Permit, you need to first find out the sector-specific eligibility criteria. 

If you incorporate your company with us, we will examine all the requirements for your foreign employees and apply for the right work visa for them on your behalf.

The Work Permit is valid for up to two years, depending on the validity of the worker’s passport, security bond, and employment period. It can be renewed online, six to eight weeks before it expires. But before renewing, you will need to complete certain steps, such as checking the quota and extending the worker’s security bond and medical insurance.

Note: From 1 April 2022, employers must buy the Primary Care Plan for Work Permit holders who stay in dormitories or work in the CMP sectors.

2. S Pass

The S Pass scheme is meant for mid-level skilled technical staff who earn *a monthly fixed salary of at least $2,500 and meet the eligibility requirements. Salary must be commensurate with experience, with older and more experienced applicants requiring higher wages to qualify.

*MOM will be increasing the qualifying salaries and levies for S Pass holders to raise the quality of S Pass holders to the top one-third of the local APT workforce. These changes will apply progressively from September 1, 2022. Moreover, S Pass quotas will also be updated from January 1, 2023.

Some other eligibility criteria applicants must meet are:

• Have a degree or diploma from an accredited institution
• Technical certificates, such as courses for qualified technicians or specialists might be considered
• Have a certification with at least one year of full-time study
• Have relevant work experience

The S Pass is valid for up to two years, depending on the worker’s passport, security bond, and length of employment. The worker is only allowed to work for the given employer and in the defined occupation throughout the validity period. If the pass holder changes jobs, the new employer must apply for a new pass.

Furthermore, the S Pass can be renewed six before it expires. The renewed pass may be valid for up to three years, depending on the worker’s passport validity. Here’s where you can learn more about renewing your S Pass: How to renew your S Pass.

Employment Pass

The Employment Pass is aimed at foreign professionals, managers, and executives with a job offer in Singapore whose monthly salaries are at least $4,500. Applicants must meet a few other requirements, such as:

• earning a fixed monthly salary of at least $5,000 (older candidates need higher salaries to qualify) if they work in the financial services sector and
• having acceptable qualifications, such as a good university degree, professional qualifications, or specialized skills.

Employers applying for an Employment Pass must first advertise on MyCareersFuture and consider all candidates fairly to encourage fair employment practices and boost labor market transparency. Learn more about the regulations for advertising.

Note: MOM will be progressively implementing changes to the Employment Pass (EP) eligibility framework over the next few years.

The Employment Pass is valid for up to two years for first-time applicants, depending on the validity of the worker’s passport, security bond, and employment period. The worker is only allowed to work for the designated employer during the validity period. If the pass holder switches jobs, the new employer must apply for a new pass.

You can renew the Employment Pass up to six months before its expiry date. The renewed pass may be valid for up to three years. The duration of the renewed pass is not affected by the length of validity of the worker’s passport. 

4. Personalised Employment Pass

The Personalised Employment Pass (PEP) scheme is designed for high-earning Employment Pass holders and overseas foreign professionals. It is not tied to an employer and offers greater flexibility than an Employment Pass. To be eligible for PEP, current EP holders must earn at least $12,000 a month, while overseas foreign professionals need to earn at least $18,000 a month.

Those under the following criteria are not eligible for PEP:

• An Employment Pass holder under the sponsorship scheme
• A freelancer or foreigner who intends to work on a freelance-basis
• A sole proprietor, partner, or where a director is also a shareholder in an ACRA-registered company
• A journalist, editor, sub-editor, or producer

To keep holding a PEP, the workers must:

• not be unemployed in Singapore for more than six months at any time. Otherwise, they will need to cancel the pass,
• earn a fixed salary of at least $144,000 per calendar year, regardless of the number of months they are in employment, and 
• notify MOM of the time they start or leave a job, their new or changed contact details, and their annual fixed salary (this must be declared to MOM by 31 January of the following year).

The PEP can be valid up to three years. However, unlike other work passes, the PEP is not renewable and issued only once. 

Why use work pass application services when hiring foreigners in Singapore?

Hiring foreigners in Singapore requires the right work passes. Biz Atom can help you navigate the immigration regulations when you need the service for yourself as a business owner, your staff, and your family members. The work visa application process is simpler with our services as it is completely done online. Talk to us if you need more information or immediate assistance.

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