kritika 
The new employment-rule changes in Singapore have opened an exciting link between top-tier local talent and foreign talent quotas. The statutory retirement age is now 64 and the end of re-employment is 69.
Local Qualifying Salary (LQS) has risen to S$1,800/mth. Employers have to consider that older local workers, who they might wish to keep within their employers, may be impacted by these changes directly, in terms of quota capacity for S Pass and Work Permit workers.
Retirement Age Rises to 64
With the current changes to the Retirement and Re-employment Act framework, eligible Singapore Citizens and Permanent Residents are now provided with employment protection until they turn 64 years old.The revised Retirement and Re-employment Act framework will provide employees until the age of 64 years old, who are Singapore Citizens or Permanent Residents.
Employers need to bring these individuals into the employment process and ensure they don’t leave positions behind simply because they hit their previous retirement age.
Why Senior Local Employees Matter for Foreign Worker Quotas?
The effect is not only on retirement planning as the foreign worker-quota system in Singapore relies on the local labour force to determine the proportion of foreign labour allowed.
The new LQS categorises a S$1,800 monthly-wage earner as a “full” local workforce unit for quota purposes, as opposed to non-workers earning less than that threshold. The employees who earn between S$900 and S$1,799 earn a half count while the ones who make less than S$900 will not provide quota credit.
Because of this, it becomes a win-win to the businesses to invest in retaining senior workers, when they are working near their sector-specific Dependency Ratio Ceiling.
Re-Employment Salary Challenge
Re-employment may also mean job restructuring/transitions, modified working arrangements and the staffing of payment systems. Industrial employers must, however, take care of the quota implications before stepping down a senior employee’s salary below the LQS rate.
After his/her salary was reduced, a worker who had previously supplied a full quota of local headcounts may only contribute to the quota with partial quota credit. That shift may have an impact on the process of applying for and renewing an S pass, and on any plans for future hires, for companies with limited foreign-worker capabilities.
When Re-Employment is not an Option?
When an employer cannot satisfy the reasonable steps to re-employment requirements they may be required to offer a worker an Employment Assistance Payment if the worker is eligible, as per statutory guidelines.
HR should start considering this issue before a worker is on the verge of retirement. Planning early allows employers to restructure positions, assess compensation and look for appropriate roles.
What Employers Should Do Now?
Companies should carry out an assessment of the staff that is about to achieve the age of 64, and determine who is likely to stay in the job under re-employment practices. Additionally, payroll teams should check to see if the salary adjustments would impact local workforce quotas’ calculation.
Then companies should emulate their headroom for foreign employees, before they sign the contracts for high-level workers. This is suitable if workforce planning is undertaken in parallel to quota analysis to avoid any restrictions on S Pass or Work Permit hiring at the last moment.
FAQs
What will be the new retirement age for Singapore?
The new rules carry over the age of 64 as the statutory retirement age in Singapore.
What will be the new re-employment age?
Singapore Citizens and Permanent Residents are eligible to be taken on under age 69, as long as the conditions in the statute are met.
What is LQS?
The Local Qualifying Salary is the lowest salary allowed for calculating the quotas for foreign workers from locals. The rules have been updated to require payments of S$1,800 per month to be paid in full.
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