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NEWS UPDATES Asean Affairs        10  March 2011

Singapore workers get salary increase

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The Singapore Ministry of Manpower is raising the salary thresholds for two groups of workers -- local full-time and skilled foreign workers -- from July 2011.

And with foreign worker levies increasing again, it is timely for companies such as Lerk Thai to innovate.

Since December, machines have been doing the cooking at Lerk Thai's outlet in Bedok Point.

In one corner, a machine works the boiler, while another handles the wok

The restaurant said the food tastes the same, but the cooking is done much quicker, while manpower costs are down by 20 to 30 percent.

Sales have also been increased by between 20 and 30 percent since the changes were introduced.

Lerk Thai is one of the restaurants managed by Select Group.

The company's executive director Jack Tan said: "With the whole process in place, the chef can multitask, instead of just standing in front of the wok to look after the wok."

Lerk Thai is now looking into introducing automation for future outlets.

Currently, the number of foreign workers a company can employ depends on the number of full-time local staff on its payroll.

To prevent companies from paying locals "token salaries" to gain access to foreign workers, from July, their benchmark salary will be raised from S$650 to S$850.

This is also in line with rising wages.

Minimum salaries for skilled foreigners are also going up.

The S-Pass levy will also be raised, by between S$190 and S$300.

Minister for Manpower Gan Kim Yong said this is because the S-Pass stock has "more than doubled" since 2007, which is "clearly not sustainable".

For S-Pass holders, this will be set at S$2,000, up from the current S$1,800, while the three categories of Employment Pass holders will be S$2,800, S$4,000 and S$8,000.

The salary threshold for Q1 passes will be raised from S$2,500 to S$2,800; that of P2 passes will go up from S$3,500 to S$4,000 and for P1 passes, the new threshold will be S$8,000, up from the current S$7,000.

Mr. Gan noted in Parliament MPs' concerns that skilled foreigners were competing with Singapore white-collar professionals - or Professionals, Managers, Executives and Technicians (PMETs) - for jobs, but he reiterated Singapore cannot close its doors to foreign talent.

"Given the tight labour market for PMETs, it is not surprising that salaries of local PMETs have moved up in recent years," Mr Gan said.

"We need to raise the qualifying salary thresholds for EP and S Pass applicants accordingly, to keep pace with the local PMETs and to encourage companies to be more selective in hiring foreign talent who can contribute to our economy."

Besides tightening the hiring of foreign workers, the ministry is also ensuring they are being hired on fair terms.

It is thus reviewing the Employment of Foreign Manpower Act, including looking at the adequacy of existing offences and penalties to ensure accountability of employers and other stakeholders.

It aims to complete the review by 2012.

The ministry is also developing an advisory to educate employers on responsible hiring practices.

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