With effect from May 1st, the Ministry of Manpower (MOM) announced changed to the Dependent Pass working requirements. All spouses and family members of foreigners working in Singapore with Dependent Passes (DP) need to obtain a work pass. (Employment Pass, S Pass or Work Permit). This becomes a new requirement to continue working in Singapore, unless they are business owners who meet certain specific criteria.
Present Dependent Pass Requirements
Currently, DP holders seeking employment are only required to obtain a Letter of Consent (LOC) from MOM to start working.
MOM has also factored in the transition time needed to obtain a work pass. Hence, existing DP holders can continue working until the expiry of their LOC. Thereafter, employers need to apply for applicable work passes for these employees if they wish to continue hiring them.
MOM mentioned that this change is to align and be consistent with the recent updates to the work pass framework. Noted by Mrs Josephine Teo, Manpower Minister, the majority of DP holders do not work during their stay in Singapore. Furthermore, those who sought employment under a LOC only constituted 1% of all work pass holders.
According to The Straits Times, as at June 2020, there were about 1.1 million work pass holders in Singapore. This excludes foreign domestic workers, which translates into about 11,000 DP holders working on LOC.
Updated Dependent Pass Requirements
Some other important points to note for employers includes the relevant qualifying salary, dependency ratio ceiling, and levies will be factored in during the application. Additionally, the work pass framework was tightened in 2020’s Unity Budget and salary requirements for Employment pass holders have been raised from $3,900 to $4,500. For foreigners seeking work in the financial services sector, it has been raised to $5,000. Apart from Employment pass holders, the S-pass qualifying salaries were raised as well.
Current DP holders who are business owners, will be granted the exception to continue running their business with a LOC. This will be granted only if their business creates local employment opportunities. Here are more details of the qualifying criteria:
- DP holder must be either a sole proprietor, partner, or company director.
- DP holder needs to minimally have 30% stake in the business.
- Business must hire at least 1 Singaporean or PR.
- The Singaporean/PR employee hired needs to be paid at least $1,400 and receives CPF contributions for at least 3 months.
Business owners who do not meet the criteria can continue running their business until their LOC expires. They can choose to apply for a one-off extension till April 30, 2022. Alternatively, is to obtain an applicable work pass to continue running their business in Singapore. More details will be released on May 1st, according to The Business Times.
Companies should review HR packages and see how they can help.
Although there may not be many LOC holders in the overall foreign employee population, this will heavily impact dual-income expatriate families where at least one party is a LOC holder. Employers who adopt trailing spouses for part-time or substitute roles will also be affected by these changes. Hence, it is important for employers to review their current LOC population. Assess their current eligibilities for the respective work passes, and plan for the transition ahead of time.
