Singapore is revamping its work permit framework, granting employers greater leeway in hiring and retaining foreign talent.

The changes, announced as part of the Ministry of Manpower’s spending plans for the coming financial year to bolster business competitiveness while ensuring a sustainable workforce.

For business and HR leaders, these adjustments present both opportunities and challenges. Here’s what you need to know:

1. No more maximum employment period

From 1 July this year, the 14- to 26-year cap on work permit holders will be scrapped. This move aligns with existing policies for workers from Malaysia, Hong Kong, Macau, South Korea, and Taiwan, who already enjoy unrestricted employment duration.

However, work permit holders will still be subject to a maximum employment age, which will be raised from 60 to 63 to match the local retirement age. Likewise, the age limit for new work permit applicants will increase from 50 to 61 for non-Malaysians and from 58 to 61 for Malaysians.

These changes will allow businesses to retain seasoned workers who are still in their prime to reduce the need for constant retraining and workforce turnover.

While older workers may come with higher healthcare costs, MoM said employers are best placed to weigh the benefits of experience against these expenses.

Also Read: Singapore's 2025 work permit policy changes: Can they balance global and local interests?

2. Expanded access to foreign talent

Singapore is broadening its non-traditional sources of labour to help businesses meet manpower needs.

From 1 June, Bhutan, Cambodia, and Laos will join the existing list of NTS countries: Bangladesh, India, Myanmar, the Philippines, Sri Lanka, and Thailand.

Additionally, the range of occupations eligible for NTS workers in the manufacturing and services sectors will expand from 1 September to include:

• Cooks (beyond Indian restaurants)
• Heavy vehicle drivers
• Manufacturing operators

To hire workers from NTS countries, employers must offer a minimum salary of S$2,000 and keep NTS work permit holders below 8% of their total workforce (excluding Employment Pass holders).

By diversifying its talent pool, Singapore aims to reduce over-reliance on only a few key labour markets while ensuring businesses can access skilled workers.

3. Higher salaries and levies for S Pass holders

Employers hiring mid-skilled foreign workers on S Passes should brace for higher qualifying salaries and levies.

From 1 September, the minimum salary for new S Pass applicants will increase from $3,150 to $3,300, with further age-based increments up to $4,800 for candidates in their mid-40s.

The financial services sector, where wages are typically higher, will see its S Pass threshold rise from $3,650 to S$3,800, with a maximum qualifying salary of $5,650 for older candidates.

Additionally, from 1 September, the Tier 1 levy (applicable to the first 10% of a company’s workforce) will increase from $550 to $650, aligning it with the Tier 2 levy for the next 5% of foreign workers.

While these changes may increase costs for businesses, MoM has moderated the pace of salary hikes to allow firms time to adapt.

4. The impact of COMPASS on employment passes

MoM also provided an update on the Complementarity Assessment Framework or COMPASS, which has been used to evaluate Employment Pass applications since 1 September 2023.

So far, 30% of all Employment Pass renewals have gone through COMPASS, with early results showing:

• A 7% drop in firms overly reliant on workers from a single nationality
• A 15% decline in firms with high dependence on foreign labour in general
• The creation of 4,000 more PMET jobs for locals

Officials have pointed out how Singapore is not closing its doors to foreign talent, but ensuring firms build a balanced and diverse workforce.

As Manpower Minister Dr Tan See Leng put it, the notion that “if you remove one foreigner, you get one more job for a local” is overly simplistic. Instead, a well-calibrated foreign workforce anchors global businesses in Singapore, creating more jobs for locals in the long run.

Also Read: Singapore turns to AI and foreign skilled workers amid manpower shortage in critical services

5. More flexibility for growth: M-SEP Scheme enhancements

The Manpower for Strategic Economic Priorities (M-SEP) scheme, introduced in December 2022, allows firms engaged in high-value activities to hire beyond standard S Pass and work permit quotas.

To qualify, firms must continue to meet two conditions:

• Contributing to Singapore’s economic priorities, such as attracting investments, driving innovation, or supporting internationalisation.
• Committing to local workforce development, either by increasing local hires, training workers for job enhancements, or participating in qualifying programmes.

From 1 May, the scheme will see two key enhancements:

• Support duration extended from two to three years to give businesses more certainty
• New eligibility pathways – companies that send local employees for overseas exposure or leadership programmes can now qualify, alongside those committing to local hiring and training.

These updates reflect Singapore’s push to balance foreign workforce access with the development of local talent.

Also Read: Singapore grants ONE Pass to 3,000 highly skilled foreign workers

What the labour policy changes mean for employers in Singapore

Dr Tan said these efforts will enable Singapore’s workforce to remain competitive while supporting business transformation. He noted that the government is actively reviewing its work permit framework and will provide updates as needed.

However, some proposals remain under consideration. These include allowing foreign workers to be cross-deployed across sectors – a complex issue that requires both efficiency and the commitment to safeguarding work pass regulations.

MoM is also evaluating calls to provide higher foreign workforce quotas to firms with inclusive employment practices.

With the last phase of the S Pass salary and levy hikes taking effect from September this year, businesses must plan ahead to navigate these changes effectively.

While Singapore is opening its doors to a more diverse workforce, the overarching goal is to foster a labour market that supports economic growth while ensuring sustainable job opportunities for locals.

Singapore’s latest manpower reforms strive for both business flexibility and local workforce protection. Employers now have greater latitude to retain experienced foreign workers, tap into a broader talent pool, and hire for in-demand roles.

However, companies must also adjust to higher salary floors and stricter hiring benchmarks.

For HR leaders, in particular, strategic workforce planning will be more important than ever.

Singapore is fine-tuning its foreign worker policies to align with long-term economic goals. This means companies that proactively adapt will be better positioned to attract and retain the right mix of local and global talent.