Fair Consideration Framework: Impacts on Singapore EP applications

Observe any building in the CBD for a day, and you’ll see talented professionals of every nation and colour. This vibrancy is possible because Singapore’s government has balanced competitiveness and locals’ interests through the Fair Consideration Framework (FCF). But this balancing act has certain effects on the Employment Pass (EP) application process. We’ll dig deeper for you in this blog post.

What is the Fair Consideration Framework?

The Singaporean government runs numerous initiatives and organisations designed to encourage both diversity and fairness in its workforce. One of these initiatives is the FCF, or Fair Consideration Framework—a set of guidelines that firms must follow when filling professional, managerial, executive, and technical (PMET) roles.

The FCF was last revised in 2018, but current Minister for Manpower Josephine Teo plans to update it once again in 2020.

The FCF plays a vital role in the employment pass process. If you’re planning to make international hires, you should get acquainted with the FCF’s rules and clauses. Additionally, you should be familiar with the government agencies in charge of enforcing it.

Support for Singapore’s workforce

The FCF is managed by the Ministry of Manpower (MOM) and enforced by the Tripartite Alliance Limited (TAL).

MOM is in charge of all things labour-related in Singapore. This includes creating new legislation for employment practices, managing work passes, outlining workplace safety and health standards, and more.

TAL is a collaboration between MOM, National Trades Union Congress (NTUC), and Singapore National Employers Federation (SNEF). It serves as a mediator and advocate for fair, non-discriminatory work practices.

Prior to the FCF’s implementation, many Singaporeans felt that companies were giving good-paying PMET jobs to foreigners without first considering locals for these positions. In response to these fears and concerns, MOM announced the FCF in 2013 and implemented it the following year.

What changes did the FCF bring?

The introduction of the FCF resulted in two major changes: the creation of the Jobs Bank, and new jobs listing requirements that affected EP applications.

Jobs Bank

The Jobs Bank is a free public platform and jobs-listing site for local employees and employers. It was created after the FCF came into force.

Based on the candidates’ current skills and competencies, the portal matches locals to relevant jobs. It also highlights jobs that are eligible for Government support through WSG’s Adapt and Grow Initiative.

The Jobs Bank also features a Careers Toolkit section, which provides career insights and guidance in the form of written content.

Jobs listing requirements

The FCF made it mandatory for certain businesses to list PMET jobs on the Jobs Bank so that talented locals would have a chance to apply for these roles.

Starting in 2014, any position that paid up to $12,000 a month had to be listed on the Jobs Bank. All companies with more than 25 employees had to follow this rule.

If, after 14 days, companies couldn’t find a local to fill the position, they could advertise the job elsewhere and open it up to foreign applicants.

2018 revisions

Former MOM Minister Lim Swee Say expanded the scope of the FCF in 2018 to cover more employees and jobs. In his February 2018 Committee of Supply debate speech, he increased the scope of the FCF’s listing requirements:

  • Positions paying up to $15,000 a month must be listed on Jobs Bank
  • Firms with 10 to 25 employees must also begin listing their jobs on Jobs Bank

As of 2020, these are the current standards. Firms that do not fulfil the listing requirement will not be able to apply for an Employment Pass for a foreigner to fill the empty position.

Exemptions to the FCF’s rules

You may be exempt from the FCF’s listing requirement if:

  • Your company has less than 10 employees
  • The fixed monthly salary for the vacancy is above S$15,000
  • The vacancy is to be filled by an intra-corporate transferee as defined by the World Trade Organization’s General Agreement on Trade in Services
  • The vacancy is short-term, i.e less than one month

Keep in mind, though, that even if you are exempt, the MOM still recommends listing any open positions on Jobs Bank.

Punishments for violations

MOM proactively monitors indications of discriminatory hiring practices. Once flagged, potentially errant employers are placed on the FCF Watchlist for closer scrutiny. Employees and third parties may also report companies they suspect of discriminatory HR practices.

Here are some things that MOM will pay close attention to:

  • Complaints of discriminatory HR practices (e.g. involving age, race, religion or nationality bias)
  • Hiring practices that differ significantly from those of industry peers. For example, employers with an exceptionally high proportion of foreign PMETs, or very high concentration of a single nationality within their organisation
  • Job descriptions that request highly personal information

If your company is placed on the Watchlist:

  • MOM will more closely examine all of your EP applications
  • MOM may require more information on your company’s HR practices
  • EP applications may take three or more months to process, compared to the normal 10 working days
  • The duration of a renewed EP may be shortened to one year (compared with the norm of two years)

Companies will have six months to come off the Watchlist. This can be done by showing the following to TAFEP, a TAL agency:

  • A comprehensive plan to improve fair employment practices
  • Evidence of fair consideration for all candidates
  • Your willingness to work directly with TAFEP to make improvements and changes

If the Watchlisted employer doesn’t improve within six months, they can expect their EP applications to be rejected automatically by MOM.

The very real impact on employee passes

Since 2016, a combined total of 2,300 Employment Pass applications have been rejected or disqualified for being discriminatory. The sectors with the most FCF violations are:

  • Administrative and support services
  • Education
  • Information and communications
  • Professional services, and
  • Wholesale trade.

In March 2019, Minister Josephine Teo shared that out of the 610 companies that were flagged at the beginning of 2019, 260 had improved their practices.

To comply with the FCF, get in touch with a work visa expert

Now that you know about the FCF, you are now better equipped to make foreign hires. The FCF is here to stay, and staying in line with the FCF guidelines will ensure that your foreign hires go as smoothly as possible.

For more detailed advice on hiring foreign talent while navigating a constantly changing legal landscape, get in touch with our visa specialists.

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