Your questions answered: LOC policy update for Dependent Pass holders in Singapore

Last month, the Ministry of Manpower (MOM) announced that effective from May 1, 2021, spouses and family members of foreign talent working in Singapore who hold Dependant Passes (DP) will need to obtain a work pass to work in place of the current Letter of Consent (LOC) option.

The British Chamber of Commerce maintains constant dialogues with the MOM, MTI and other agencies, which have enabled us to react quickly to this policy announcement, gather feedback from members, and confirm relevant facts in response, which we are sharing with the business community below for your planning purposes.


Included in this update:

  • Summary of options
  • FAQs
  • Useful links
  • Next steps

 

Summary of Options

Firstly, it is important to note that both new and renewal applications are continuing to be processed up to the new rule change date. For those holding current LOCs that expire within 180 days from Apr 30, a renewal can be applied between now and this date. For organisations who have employee LOCs expiring after the new changes take effect, several options are available within the group of work passes which are detailed in full on the Ministry of Manpower’s website

The Employment Pass, S Pass and Work Permit are all viable options for DP LOC holders of all nationalities. The qualifying salary, quotas and/or levies for the respective work passes will apply.
 

Employment Pass (EP):

Qualifying salary and other criteria:

  • Earning a fixed monthly salary of at least $4,500, increasing to reflect work experience and age (effective Sep 1 2020 for new applications and May 1 2021 for renewals). A higher rate of $5,000 applies to those in the financial services sector (effective Dec 1 2020).
  • Holding acceptable qualifications from an accredited institution, usually a good university degree, professional qualifications or specialised skills. Tools are available to check organisations' accredited status; however, a definitive list is not available. 
  •  If the candidate is not an existing employee, employers must advertise on MyCareersFuture.sg and consider all candidates fairly before applying for an EP unless other exemption reasons apply.

Foreign worker levy/quota:

  • Not required.


S Pass:

Qualifying salary and other criteria:

  • Earning a fixed monthly salary of at least $2,500, increasing to reflect work experience and age (effective Oct 1 2020 for new applications and May 1 2021 for renewals).
  • Holding a degree or diploma from an accredited institution (as above). Consideration may be given for technical certificates requiring at least one year of full-time study.
  • If the candidate is not an existing employee, employers must advertise on MyCareersFuture.sg and consider all candidates fairly before applying for an S Pass unless exemption reasons apply.

Foreign worker levy/quota:

  • Monthly levy applies – varies by sector.
  • A quota limits the number of S Pass holders an organisation may hire – varies by sector.


Work Permit for Foreign Workers:

Qualifying salary and other criteria:

  • No minimum qualifying salary 

Foreign worker levy/quota:

  • Monthly levy applies - varies by sector.
  • A quota limits the number of Work Permit holders an organisation may hire - varies by sector.

We appreciate that guidance and eligibility for each work pass type may appear to be definitive online or not relevant to your organisation, and so questions may arise within your business to plan for the ideal solution. If you would like to discuss your specific circumstances with the MOM support team ahead of an application for your business planning, you are encouraged to contact the hotline on +65 6438 5122 (M-F 8.30-5.30 / Sat 8.30-1). 

 

FAQs

Please refer below to some of the questions our members have been raising to us on the topic of LOCs, for which we have consulted the MOM for a response.
 

Can an extension be granted for employees whose LOCs expire within 2021?

If an LOC expires within 180 days of Apr 30, 2021, then an organisation can apply for a renewal, and this needs to be made before the May 1, 2021 policy change. No further extensions are planned at this time.
 

Until what date can new LOC applications be submitted?

Before the May 1, 2021 policy change date, new applications will be accepted as usual. 
 

Given the nature of the announcement, it follows that an increase in work pass applications may follow - will this cause further delays in processing?

We have received assurances that sufficient resources to manage any increase in enquiries and applications will be in place to avoid delays.
 

Will allowances be made for contract types that do not easily fall within the brackets of existing work pass eligibility, such as part-time and freelance employees, those running their own business, or acting as the local representative in the market?

It is not the MOM's intention to inhibit employment in Singapore with this policy change; many current LOC holders will be able to transition to one of the above work pass options seamlessly.

MOM recognises that some DP holders who run businesses may not meet the eligibility criteria for an EP or EntrePass. DP holders will be eligible to continue running their business on an LOC, if:

  1. The DP holder is a sole proprietor, partner, or company director with at least 30% shareholding in the business; and
  2. The business hires at least one Singaporean/Permanent Resident who earns at least the prevailing Local Qualifying Salary (currently $1,400) and receives CPF contributions for at least 3 months

DP holders who currently do not meet the above criteria can continue to run their business on their existing LOC until its expiry, or apply for a one-off extension of their LOC until April 30, 2022 when next renewing their DP. This is intended to provide sufficient time for them to make the necessary adjustments to their business.

The MOM team will work with organisations to establish the appropriate type of work pass on a case-by-case basis at the point of application. If you would like to discuss your case with the MOM’s support team ahead of application for your business planning, members are encouraged to contact the hotline on +65 6438 5122 (M-F 8.30-5.30 / Sat 8.30-1).
 

Will there be an increase in quotas on S Passes to balance the withdrawal of the LOC route to employment for organisations hiring foreign talent?

There are no plans to redress the current quotas in place, which form part of Singapore's ongoing manpower strategy to sustain restructuring and improve manpower resilience.
 

Will there be ongoing consultation with the business community as policies continue to be reviewed in the future?

The British Chamber has established two-way dialogues with the Ministry of Manpower, MTI and other Government agencies where we can swiftly feedback any member concerns as a group and receive guidance for your business planning. These conversations in the background happen on an ongoing basis, in addition to regular opportunities for members to address questions and feedback to the MOM within our events. We encourage all our members to continue to share their feedback with us, and we will, in turn, continue to support the needs of the community. For more information on British Chamber membership click here.

 

Useful links

 

Next steps

We recommend that organisations affected by the LOC changes evaluate their early renewal options as a first step and consider their work pass types for application; if this is not possible, consulting the hotline to discuss your case.

If you have remaining questions and concerns, our members are encouraged to sign up to attend our upcoming event on 29th April, where questions can be asked directly to the MOM Work Pass Division – another example of an exclusive members-only Government engagement opportunity brought to you by the British Chamber.