Manpower Quota: What constitutes a local full time employee?

by | Nov 25, 2015

Business has picked up and you’re desperately in need of more manpower to fulfil your operational liabilities. You have a couple of work permit and S Pass candidates lined up but to qualify for manpower quota, you require a certain number of local full time employees on your payroll. At the back of your mind, you’re thinking as long as you hire any Singaporean or Permanent Resident (PR), it’d count as a local full time employee. Right? Well, maybe not so. There are conditions set in place by the Ministry of Manpower (MOM) which highlight specifically what constitutes a local full time employee. Today, we intend to clear the air on what they are.

Salary Requirements & Manpower Quota

To qualify as a local full time employee, Singaporeans or PRs hired must earn at least $1,000 per month. This is not cast in stone though. If you hire locals who earn less than $1,000 but at least $500, they can be counted as local part time employees. The good news is two local part time employees is equal to one local full time employee. Some leeway perhaps to aid in the manpower crunch. Just make sure all your employees are officially employed under a contract of service.

How CPF Contribution Affects the Quota Period

Do you know MOM uses your company’s Central Provident Fund (CPF) contributions to determine the number of local full time employees you have? They are determined based on a three-month average period so you’re not immediately affected by staff turnover. The three-month average period is derived based on two scenarios:

  1. Contribution made by the 14th of the same month will be taken into account for next month’s manpower quota.
    • If November’s contribution was paid before 14 November, your quota for December will be based on contributions made in September, October and November.
  2. Contributions made on the following month will instead use the average of the previous three months.
    • If November’s contribution was paid in December, your quota for December will be based on contributions made in August, September and October.

Disqualification of Local Full Time Employees

Here’s something to motivate you to pay CPF on time. Late or default payments will not be taken into consideration by MOM when calculating foreign worker quota. It doesn’t help even if you pay later with interest and clear your fines. Check also that your local full time employees are not receiving CPF contributions from three or more employers as they’d be immediately disqualified.

Conclusion

Keeping track of manpower flows as well as CPF contributions can be a challenge, notably in manpower intensive businesses. And a glitch in any of the aforementioned pointers could cost your company its foreign worker quota. Why take the chance? Spend your time working, not tracking. Leave the tracking instead to a human resource management system, Learn more about HRMS.

Download our FREE eBook to discover other aspects of being compliant:

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