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Oral Answer by Mrs Josephine Teo Minister for Manpower to PQ on Safeguards for JGI

NOTICE PAPER NO. 102 OF 2020 FOR THE SITTING ON 14 OCTOBER 2020 QUESTION NO. 252 FOR ORAL ANSWER

MP: Mr Murali Pillai

To ask the Minister for Manpower in respect of the Jobs Growth Incentive (JGI), what safeguards will be put in place to guard against companies reducing their headcount of existing employees and at the same time leveraging on the JGI to recruit new workers with the Government providing salary co-payment resulting in no net growth of jobs.

Answer

  1. The Jobs Growth Incentive, or JGI, supports firms to accelerate the hiring of the local workforce over six months. JGI was announced in August 2020, and will be provided to qualifying hires from September 2020 to February 2021. Eligible local hires can attract salary support for up to 12 months.
  2. To be eligible for JGI, firms must achieve an increase in their local workforce size from that in August 2020. Hence, a firm with no net growth of jobs will not receive JGI payouts. A firm that initially increased its local headcount but subsequently reduced its local headcount below its original level would also stop receiving future JGI payouts. In addition, to ensure that the increase in local workforce is meaningful, it must be accompanied by an increase in the number of local employees in jobs that pay at least $1,400 in gross monthly wages.

  3. There may be valid reasons why a firm that receives JGI has to later let existing employees go, such as retirement or voluntary resignations. If we were to impose the condition that the firm promises not to let any worker go, that would impose significant rigidity to the firm. In practice, firms would likely prefer to moderate their new hiring than have to deal with the risk of support being withdrawn. Hence, we take a practical approach, where a firm’s JGI payout is reduced in proportion to the number of existing employees that left the firm after the scheme started in September 2020. This gives the firms assurance of funding support while signalling clearly that they should make efforts to retain existing employees even as they bring in new hires.

  4. In addition, IRAS has put in place a robust anti-gaming framework to identify risks and prevent abuse. IRAS uses data analytics and risk profiling to identify cases, which are sent to a dedicated team for review. We view any attempt to abuse grant schemes very seriously, and will not hesitate to report any malpractices or abuse to the Police for investigation and prosecution.