14 July 2017
Staff Recruitment in Singapore
Singapore has a small but highly educated labour force, with 67% of its 5.5 million people participating in the labour market, and one-third of the workforce being foreign workers. As set out in the Report of the Committee on Future Economy: Pioneers of the Next Generation (2017), one of Singapore’s economic strategies is to reduce the reliance on foreign employment by improving local education. Already, more than half of Singaporeans are tertiary-educated and there is an increased focus to further improve this through training schemes such as the SkillsFuture movement.
The Ministry of Manpower (MOM) is the entity responsible in the field of labour and employment. Legislation covering employment practices and labour relations can be found on the MOM website. The key points on staff recruitment in Singapore that Hong Kong companies should be aware of include the following:
• There is no minimum wage in Singapore and wage is negotiated between the employer and employee. According to Singapore’s Yearbook of Manpower Statistics 2016, the gross average monthly income was around SG$4,000 (US$2,900) in 2015.
• Both the employer and employee make monthly contributions to the Central Provident Fund (CPF), a mandatory social security scheme in Singapore. Employer’s contribution range between 7.5% and 17% and employees contributions range from 5% to 20%. The specific rate is dependent on age, with higher contributions required for younger workers. Further details on the CPF can be found on the CPF Website.
• There are restrictions on the employment of foreign workers, all of whom require a work visa before commencing work. Employees are required to pay a foreign worker levy, commonly known as “levy”, which is adopted by Singapore as a pricing mechanism to regulate the number of foreign workers. Monthly levy rates vary between SG$300 (US$216) to SG$950 (US$685) per worker and are dependent on:
• The worker’s qualification with lower levies applicable for higher skilled workers.
• Dependency ceiling or quota. There is a maximum ratio of foreign workers to the total workforce that a company in a given sector can employ. This can be calculated using the Foreign Worker Quota calculator.
• Employers are allowed to join a trade union and the Registry of Trade Unions ensures the administration of responsible trade unions in Singapore through the Trade Unions Act and other related legislation. In 2015 just over 0.7 million workers were members of a trade union (Singapore’s Yearbook of Manpower Statistics 2016).
- Regulatory Environment
- Establishing a Presence
- Intellectual Property Protection
- Staff Recruitment
- Tax Considerations
- Import/Export Procedures
- Further information