MOM Committee of Supply 2021: Highlights for HR leaders to know

As part of priorities for this year, Minister Teo shared that the raise in retirement age and re-employment age will proceed as planned in July 2022; while from 1 May 2021, DP holders will require a valid work pass to work in Singapore. Full updates here.

Deeper aid for the hiring of locals to support rebound, help for every segment of the workforce to emerge stronger from the pandemic, and further support for business transformations - these are the three overarching priorities of Singapore's Ministry of Manpower (MOM) in 2021, Manpower Minister Josephine Teo has announced. 

In her speech at MOM's Committee of Supply (COS) 2021 yesterday (3 March), Minister Teo noted that these three priorities will cover not just the short-term concerns, but also the medium- and longer-term concerns in the country. She said: "Digitalisation, remote work, widening income gaps and an ageing workforce will continue to challenge us. We must aim to overcome the crisis and help every segment of the workforce emerge stronger.

"To do this well, our employers are critical. Their capacity to innovate and become more productive will determine how much we can improve job quality over time. In supporting business transformation, we will pay particular attention to SMEs."

In line with this, the three overarching priorities shared by Minister Teo are highlighted below.

"Supporting our rebound"

On this, Minister Teo shared: Given the uncertainties that still persist, the job market may take a while to recover. Our aim is two-fold: First, for employers, shore up hiring demand. Second, for workers, seize better opportunities."

Thus, as announced in Budget 2021, the Government will be extending the SGUnited Jobs and Skills Package till September this year, costing a total of S$5.4bn.

Through this extension, there will be enhanced support under the Jobs Growth Incentive, to employers who hire local workers aged 40 and above, persons with disabilities, and ex-offenders. This will be 50% co-payment for the first S$6,000 (previously S$5,000) of gross monthly income for up to 18 months (previously 12 months).

Eligible employers who hired these employees from September 2020 to February 2021, will benefit from this enhanced support from March 2021 onwards.

Next, there will be two key enhancements made to the Mid-Career Pathways programmes, in order to make attachments "more attractive" for mature individuals and their host companies. As such, the programmes will be extended till March 2022.

With this, participants aged 40 and above can receive higher training allowances of up to S$3,800, compared to S$3,000 previously. Host organisations will share just 10% of the allowance, compared to 20% previously.

Minister Teo noted: "With this enhancement, it is even more affordable to host someone with years of work experience than a new job entrant."

Lastly, the Government will extend the SGUnited Traineeships programme till March 2022. Through this, it will be increasing the maximum training allowance for mature workers, up from S$3,000 to S$3,800. The Government's co-funding for this will also be increased from 80% to 90%. More details on this will be shared by Minister of State for MOM Gan Siow Huang at the Ministry of Education's COS.

"Workforce resilience: Emerging stronger together"

This area of priority will cover five key thrusts targeting every segment of the workforce:

Equality, mobility and dignity for lower-wage workers

In continuing to support lower-wage workers, the Tripartite Workgroup on Lower-Wage Workers has developed a plan to expand the Progressive Wage Model (PWM). 

Sharing on this in a separate COS speech, Senior Minister of State for Manpower Zaqy Mohammad, who also chares the Workgroup, said as a start, it has agreed to expand the PWM to the food and services and retail sectors.

"These sectors are among the sectors with the largest numbers of lower-wage workers. We estimate that these PWMs could cover up to 80,000 local workers."

As for the other sectors that NTUC is pushing for a PWM in, Minister Zaqy said that the Tripartite Cluster committees have been convened for each of these sectors, and will recommend an implementation timeline, taking on board all stakeholders’ concerns, including market conditions.

The committees will target to submit their recommendations on the timeline and other implementation details to the Government by the end of the year.

Apart from the above, the Workgroup is also looking into extending the existing PWMs to benefit up to 50,000 in-house cleaners, security officers and landscape maintenance workers, and intends to consulted the key affected sectors on a suitable timeline to move forward. 

Employability and retirement adequacy of mature workers

In her speech, Minister Teo shared that the Government will proceed as planned, in raising the statutory minimum retirement age and re-employment age effective 1 July 2022. 

• The statutory minimum Retirement Age will go up from 62 to 63.
• The statutory Re-Employment Age will also go up from 67 to 68.

As earlier committed, the public service will proceed with these changes one year ahead of legislation, she added. 

On the raises, Minister Teo said: "This will help to keep us on track to raise the Retirement Age to 65 and Re-Employment Age to 70 by the end of this decade.

"While we are asking more of our employers, we have also provided them fair support to make these adjustments. This is why we announced the S$1.3bn Senior Worker Support Package last year."

Additionally, companies that raise their retirement and re-employment ages before it becomes compulsory, can apply for the Senior Worker Early Adopter Grant; While employers that allow senior workers to work part-time can apply for the Part-time Re-employment Grant. 

This year, the Ministry will introduce new programmes for in-demand jobs in growing sectors such as manufacturing and information communications & technology, to "provide fair opportunities" for jobseekers.

The training and salary support in these programmes come on top of the enhanced Jobs Growth Incentive, thus employers can get up to 95% of the costs covered.

Lastly, the tripartite partners have agreed to push ahead, barring unforeseen circumstances, to raise senior worker CPF contribution rates from 1 Jan 2022.

The CPF Transition Offset Package will absorb half of the increase for employers in the first year, and the impact will be further cushioned by the Senior Employment Credit which provides up to 8% wage offset to employers of senior workers for the next two years until the end of 2022.

The partners will study the extension beyond 2022 and will update in due course.

An inclusive and progressive workforce 

With regard to helping Self-Employed Persons (SEPs), Minister Teo highlighted three areas of focus:

• Supporting SEPs who wish to switch to regular employment.
• Helping SEPs better meet healthcare and retirement needs.
• Find a better balance in the arrangements between “gig workers” and their intermediaries that deploy their services.

As part of these, the SGUnited Jobs and Skills Package will play a part in supporting the transition to regular employment. At the same time, the qualifying period for the Matched MediSave Contribution Scheme will be extended for another year, till 31 Dec 2021, to provide more time for SEPs to fully benefit from this transition package.

A resilient foreign workforce 

On this point, Minister Teo highlighted that periodic adjustments will continue to be made to the Local Qualifying Salary, to ensure that locals are not hired on a token salary in order to access foreign worker quota.

The Government will hold off further increases this year to give firms time to recover from the impact of the COVID-19 pandemic.

S Pass holders

The Government will continue to review its S Pass levers, including qualifying salary, quotas, and levies. This, Minister Teo said, will be done together with "efforts to transform industries and upskill the local workforce."

"Over this decade, employers should expect further changes to S Pass rules to be phased in. I encourage them to start making the efforts to strengthen your local talent pipeline at this level."

Employment Pass

At the Employment Pass (EP) level, MOM's aim is two-fold:

• First, it will continue to ensure that foreign professionals complement the local PME workforce. "The salary threshold is by no means a perfect gatekeeper of quality, but it is easy to understand and administer."

• Second, it will ensure employers practice fair hiring and improve the diversity of their foreign PMET workforce. "It is wrong for employers to disregard qualified local candidates because of discrimination." MOS Gan will say more on this in her speech.

"Supporting business transformation, underpinned by tripartism" 

On this point, Minister Teo shared that MOM will help SMEs attract talent in the following ways:

• By helping companies looking for local talent to also get professional assistance.

• It has recently appointed five "best-in-class" employment agencies under a new Human Capital Partnership programme. These agencies help employers consider talented locals they may sometimes overlook, by focusing on their transferrable skills and relevant experience.

• There is also the P-Max programme which has placed over 7,800 PMETs into 7,300 SMEs in the last five years.

Next, the Government will set aside close to S$10mn over the next two years for more of such Jobs Transformation Maps (JTMs).

A total of three JTMs have been completed, and there are plans for another 12 to be put in place.

View the highlights in infographic form, here. 

Lead image / MOM