Question about Singapore Quota system?

Last updated: October 23, 2024 at 16:35 pm

Question: Does Singapore have a quota system where you have to have a certain number of local employees before you can hire someone from abroad?

Answer: The foreign worker quota system in Singapore is a government policy that aims to regulate the number of foreign workers that companies can hire in various industries and job sectors. This policy ensures that Singaporeans have fair access to job opportunities and that companies prioritise hiring and developing local talent.

Under the quota system, companies are required to maintain a specific ratio of local workers to foreign workers, which varies depending on the industry and skill level of the workers. For example, in the manufacturing industry, the ratio is currently set at 60% local workers to 40% foreign workers. In the services industry, the ratio varies based on the specific subsector and can range from 30% to 70% local workers to 70% to 30% foreign workers.

If a company exceeds its foreign worker quota, it is required to pay a levy for each additional foreign worker employed. The levy amount also varies based on the industry and skill level of the workers, and it can range from S$300 to S$950 per month.

In general, the foreign worker quota system aims to strike a balance between the need for foreign talent in certain industries and the need to protect job opportunities for Singaporeans. The exact number of Singaporeans required to be employed for each foreign worker hired by a company will depend on the specific industry and the current quota ratios in place.

However, companies can qualify for tax concessions or exemptions if they meet certain criteria. For instance, companies that have a higher proportion of Singaporean employees compared to foreign employees can enjoy tax concessions. Similarly, companies that invest in productivity-enhancing technologies or hire and train local workers can also receive levy waivers or reductions.

As of September 2021, the levy rates for work permit holders in various sectors in Singapore are:

Manufacturing: S$300
Construction: S$450
Marine shipyard: S$400
Services and others: S$330 to S$650
However, these rates are subject to change, and companies may also be eligible for levy concessions or waivers if they meet certain criteria, such as having a higher proportion of local employees, investing in productivity-enhancing measures, or hiring and training local workers.

It is important to note that the levy is just one of the costs associated with employing foreign workers in Singapore. Companies also need to comply with other requirements, such as providing medical insurance, ensuring that their foreign employees have valid work permits, and complying with relevant employment laws and regulations.

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