Thursday, July 28, 2016

Minimum salary for Employment Pass holders

I do not agree with the policy of the government to raise the minimum salary for employment pass holders.

I prefer the government to introduce a levy for EP holders and follow the practice for S-pass and work permit holders. This is a more effective measure. The levy for EP holders should be higher than for S-pass holders, but it could also be set at the same level.

The policy of increasing the minimum salary for EP holders benefit the EP holders. The employers are "forced" to pay a higher salary to them. The employers may prefer to employ EP holders for a variety of reasons - reduced job hopping, not necessary to perform SAF reservist duty, etc.

Five years ago, I interviewed a foreigner for an IT job. He asked me to declare his salary as $2,500 to meet the  "minimum salary" at that time, but to pay him a lower rate of $2,000. He said that it was a common practice for some employers to adopt this approach to save on the levy. Many of his friends were working on this type of arrangement.

I did not want to "cheat" the system. I employed him on a S-pass and paid the levy. He must have felt that I was too stupid or too law abiding.

I wonder if this practice is still happening now. What is the point of increasing the minimum salary for EP holders? It is better to introduce a levy.

1 comment:

tanhwa said...

yes this practise is still on going....

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