5 reasons why the increase in qualifying salary for EP makes no sense

The following is a letter from one of our readers, Frank.

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I refer to the news, ‘Qualifying salary for Employment Pass to increase to $3,600 from $3,300 from 1 Jan’. The report said: “Qualifying salary for foreigners to be hired on Employment Passes to be raised to $3,600 from $3,300 to keep pace with rising labour costs with average starting salaries of local PMETs hitting $3,300 according to MOM statistics”.

This makes no sense at all and the odds are still stacked heavily against the local PMETs for the following reasons.

1. PMETs on Employment Passes are exempted from the mandatory Employers CPF contribution which currently stands at 17% of basic and cap at $6,000/= and at $3,300 starting basic, a local will cost:-

$3,300 + CPF$561 = $3861 compared with $3,600 for a foreign PMET. Cheaper by a good $261.

2. Local males have a month of military reservist training each year & two weeks paternity leave. Local females, four months maternity leave. This is a big disruption to employers for which the foreign PMETs are not subjected to.

3. There are no quotas, no levies placed on Employment Passes S-Passes and Work Permits. It’s free flow.

4. There is no guarantee that $3,600 will have you maintain the quality of foreign PMETs as workplace discrimination against the local PMETs are rampant with foreign enclaves.

5. It’s difficult to administer and execute, as employers can game the system by “creative means” blowing up wages factoring in other elements in kind that’s difficult to quantify. Added to that backdoor refund. This has been the practices that MOM is barely scratching the surface.

Looks like the system is designed in deliberation to screw the locals for political ends, in the conversion of PRs with the aim of minting new citizens to build up a loyalty vote bank.