SINGAPORE — Small-and-medium size enterprises (SMEs) will get a three-month extension of their levy payment, for more flexibility in their cash-flow management during the COVID-19 pandemic.
This is one of three measures introduced by the Ministry of Manpower (MOM) on Tuesday (24 March) to help businesses cope during the coronavirus period.
The other two measures are a levy waiver for up to 90 days for foreign workers on overseas leave, and a Man-Year Entitlement (MYE) refund for construction firms affected by COVID-19 disruptions with effect from 1 April.
In addition, the MOM urges firms with excess manpower to prioritise locals to be retained in their jobs. These firms should also give consent for their existing foreign workers to be transferred to other employers facing manpower shortages.
Five months to pay foreign worker levy
Currently, the foreign worker levy incurred in any month is due for payment by the 14th of the following month. Employers who fail to make payment on the due date will have their new and renewal work pass applications rejected. Two consecutive months of late or non-payment of levies will result in all existing work passes being revoked.
With immediate effect, MOM will provide SMEs with an additional three months to make the levy payment. In total, SMEs will have up to five months to pay for the foreign worker levy from the month it is incurred, before revocation kicks in.
This temporary relief measure will apply to levies incurred in 2020. Around 60,000 firms stand to benefit from this measure.
Employers who use the extended payment timeline offered by MOM are encouraged to retain existing workers and should not be employing new foreign workers. MOM will hence allow renewals but not new applications of work passes from these firms.
The 2 per cent monthly late payment penalty will still apply for levies which are deferred. Firms are hence encouraged to exercise financial prudence and plan their cash flow to pay levies on time as far as possible.
Levy waiver extended from 60 to 90 days
Currently, MOM allows levy waiver for up to 60 days for foreign workers who go on overseas home leave for at least seven consecutive days.
In view of the widespread travel restrictions and difficulties workers may face in returning to Singapore, MOM will extend the levy waiver period to up to 90 days with immediate effect for foreign workers who are currently on overseas leave.
This extended period of levy waiver will also apply to employers who send their foreign workers home from now till end 2020.
Unused MYEs to be refunded
MOM and the Building and Construction Authority (BCA) have received feedback from the Singapore Contractors Association Limited (SCAL) that construction firms are facing work disruptions due to delays in overseas supplies and entry of foreign construction workers due to travel restrictions.
As any unused MYEs are currently forfeited, construction firms will be unable to fully utilise the MYEs allocated for their projects. This results in higher cost to contractors who will have to hire foreign workers on higher levy rates.
MOM has worked together with SCAL and BCA on a temporary scheme to refund unused MYEs due to work disruptions from COVID-19. Firms have the flexibility to use the refunded MYE within one year to hire new workers or renew existing ones.
This relief measure will be available for a period of six months starting from 1 April. Affected firms can apply to BCA for the MYE refund.
Defer plans to bring in new foreign workers
In view of the heightened risk of further importation of COVID-19 to Singapore, the Ministry of Health issued an advisory on 18 March for all travel abroad to be deferred.
MOM is limiting the number of entry approvals for work pass holders to enter Singapore to a very small number, with priority given to essential services like healthcare and transport.
Employers are advised to:
defer plans to bring in new foreign workers from overseas until the situation stabilises;
if foreign workers are still needed, retain existing foreign workers already in Singapore; and
if the foreign workers are not needed, give consent for them to be transferred to other employers facing manpower shortages in the same sector.
Firms in manufacturing and services sectors can approach the Singapore Business Federation (SBF) for assistance under its SBF ManpowerConnect scheme. Construction firms can tap on the Foreign Construction Worker Directory System which facilitates matching of workers with prospective employers.
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