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Raising Foreign Worker Levies to Boost Productivity

Levy rates & tiers for S Pass and Work Permit to be increased gradually between July 2010 and July 2012.

The foreign worker levy rates and levy tiers for S Pass and Work Permit holders will be increase gradually between July 2010 and July 2012. Companies should take this time to make cost adjustments and invest in measures to boost productivity.

Key changes include the following:

  1. Increase in the S Pass and Work Permit levy rates. This is to better moderate employers’ demand for foreign manpower and to encourage investment in productivity.
  2. Introduction of levy tiers for S Pass Workers and changes to levy tiers for manufacturing and services sector. The changes will be slowly phased in by July 2012 for companies to adjust their dependence on foreign manpower.
  3. Greater differentiation in levy rates between skilled and unskilled foreign workers. This aims to encourage companies that need foreign workers to employ better skilled and thereby more productive ones;
There is no change in Dependency Ratios. This maintains companies’ access to, while at the same time encourages them to reduce reliance on, foreign manpower. There will also be no changes to Foreign Domestic Worker levy rates.

MOM will also be stepping up monitoring and enforcement against employers who attempt to recover the levy from their foreign workers, whether directly or indirectly. Those who do so will be prosecuted or barred from hiring foreign workers.