New compass framework for EP applicants
Why is there a new points system for EP applicants?
The current Employment Pass (EP) qualifying condition is solely based on the minimum qualifying income. With adjustments to the minimum qualifying salaries to $5000 for most sectors from Sep 1 this year, foreigners would also have to meet a minimum score under a new points system from Sep 2023 as well.
The intention for EP qualifying salary is to match the top ⅓ or 65th percentile of local PMET wages by age, said Manpower Minister Dr. Tan See Leng during MOM’s Committee of Supply debate on Mar 4. This move is part of MOM’s regular updates to ensure that our qualifying salary keeps pace with local wage growth and foreigners are not coming in just because they are cheaper than local PMETs. Applicants will have to score sufficient points under a new COMPASS (Complementarity Assessment Framework) points system in order to work here. This system applies for new EP applicants from Sep next year and for renewal applications from Sep 2024. With COMPASS, employers are able “to select high-quality foreign professionals, while improving workforce diversity and building a strong Singaporean core”.
How does COMPASS work?
According to the MOM website, EP applicants are evaluated based on personal and firm-related attributes, and every application is scored on 4 foundational criteria. Applicants will gain points if they meet or exceed expectations and can earn additional points on bonus criteria if they meet the relevant qualifying conditions. These criteria recognise applications that bring in skills in shortage and support strategic economic priorities, creating good jobs for Singaporeans.
(Source: Ministry of Manpower)
(Source: Channel News Asia)
The EP application can score up to 20 points per attribute, as presented in the infographic from Channel News Asia. An individual and/or firm that meets the expectations for each attribute or criteria will score 10 points and if it exceeds expectations, it scores 20 points. Applicants or firms can also score on bonus criteria such as “skills bonus” for jobs where skills shortages exist and “Strategic Economic Priorities Bonus” for firms which engage in innovation and internationalization activities in partnership with the government. Firms are also required to meet two attributes. The firm can score 10 points if the proportion of its employees with the same nationality as the applicant is between 5 and 25 percent. It scores 0 if the proportion is more than 25 percent, and 20 points if it is less than 5 percent. If the firm’s share of local PMETs is at the 20th to 50th percentile compared to its subsector, the firm scores another 10 points. For small firms with fewer than 25 PMET employees, they score 10 points on diversity and support for local employment attributes by default. If the application meets expectations on all 4 attributes, it should pass with 40 points; or be approved with the bonus criteria.
According to MOM, the candidate is exempted from COMPASS if they fulfill any of the following criteria:
Earning at least $20,000 fixed monthly salary (similar to the prevailing Fair Consideration Framework job advertising exemption).
Applying as an overseas intra-corporate transferee under the World Trade Organisation’s General Agreement on Trade in Services or an applicable Free Trade Agreement that Singapore is party to.
Filling a role on a short-term basis, i.e. 1 month or less.
How does COMPASS affect your company?
The Manpower Minister clarified that COMPASS is not designed to make it more challenging for companies to obtain an EP and the majority of applications today would still pass.
"Some firms, however, would need to make adjustments under COMPASS. And they would know clearly which areas to improve on and how to respond accordingly, given the transparency, clarity, and predictability of COMPASS,” said Dr. Tan.
This also means that companies that are highly skewed towards hiring one nationality in their employee base would need to transition. This may be especially so for bigger companies and MNCs. However, given that these changes would only kick in the next two years, there is still some time for companies to adapt to the new framework. More resources will be made available as we are nearing the deadline for these changes. It is advisable for companies to brace for transition as it is currently unknown how such changes will impact the labour market landscape.
What do you think of the new COMPASS framework? How is your company adapting internally to cope with the changes in hiring foreigners?