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Foreign worker levy and COVID-19 Act Part 10A extended until June 2022 for companies in Singapore's CMP sectors

Foreign worker levy and COVID-19 Act Part 10A extended until June 2022 for companies in Singapore's CMP sectors

On top of that, the period of employment (POE) requirement for man-year entitlement (MYE)-waiver will be permanently removed.

In view of continued manpower shortages and elevated business costs arising from COVID-19, Singapore's Ministry of Manpower (MOM) has announced the extension of support measures for companies in the construction, marine shipyard & process (CMP) sectors.

In particular, these extensions apply to the foreign worker levy (FWL) rebate, the COVID-19 (Temporary Measures) Act (or COTMA) 10A, and the period of employment (POE) requirement for man-year entitlement (MYE)-waiver.

Foreign worker levy (FWL) rebate

The FWL rebate, which is specifically for the CMP work permit holders (WPH), will be extended for another three months, at S$250 per month for April and May 2022, and S$200 for June 2022. Prior to this, the rebate was slated to expire in end-March 2022. Explaining why there is a lower FWL rebate for June 2022, the Ministry said that it reflects "the improving manpower inflow for the CMP sectors", with manpower costs expected to moderate accordingly.

That said, MOM highlighted that the Government will "continue to monitor the situation" before deciding closer to June 2022 whether an extension of the rebate is necessary. "As the FWL rebate is meant to be a temporary support, we encourage firms to press on with longer-term productivity improvements to be more manpower-lean and resilient against future manpower disruption," the Ministry said.

COVID-19 (Temporary Measures) Act (COTMA) Part 10A

Apart from the FWL rebate, the COTMA Part 10A — which allows contractors in the built environment (BE) sector to seek a determination from an assessor to adjust the contract sum to address the increase in foreign manpower salary costs — will also be extended for an additional three months till 30 June 2022. This will, according to the Ministry, complement the extension of the FWL rebate for the same duration and provide additional assurance to firms in the BE sector.

Previously, the prescribed period for COTMA Part 10A was originally extended till 31 March 2022.

While there is an extension until June 2022, MOM reminded firms that the COTMA relief provided to the BE sector "is meant to be time-limited". As such, "firms will need to partner one another even more closely to ensure business sustainability and longer-term resilience of the BE sector".

Period of employment (POE) requirement

In August 2021, Singapore removed the minimum POE requirement of three years and two years for construction & process WPHs respectively, who are either arriving from non-traditional sources (NTS) such as Bangladesh, India, Myanmar, the Philippines, Sri Lanka, and Thailand, or the People’s Republic of China. This allowed employers to qualify for a man-year entitlement (MYE)-waiver.

For context, the MYE is a work permit allocation system for workers in the construction & process sectors, and reflects the total number of NTS and PRC WPHs an employer is allowed to employ, based on the value of projects or contracts awarded by developers or owners. The removal announcement was to help support the inflow and retention of workers, and is due to expire in March 2022.

In this latest announcement, however, the Ministry shared that the Government will now "make the removal of the minimum POE requirement permanent", which will see all incoming or renewal NTS and PRC WPHs no longer needing to meet the minimum POE requirement to qualify for the MYE-waiver.

MOM also noted that in the longer term, the Government "will continue to work closely with the sectors through the Industry Transformation Maps to transform businesses and reduce their reliance on manpower" as the CMP sectors are key to the Singaporean economy.

Read alsoPre-departure programme and specified travel lanes for work permit holders in Singapore's CMP sectors from 13 March

Image / 123RF

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