Government aims to support wage growth for lower-wage workers and SMEs
In an effort to further support lower-wage workers, Singapore is reviewing its Local Qualifying Salary (LQS) – the minimum salary that local workers must receive to ensure employers hiring foreign workers comply with wage requirements. This review was announced by Zaqy Mohamad, Senior Minister of State for Manpower, on January 26, 2024, during a commemoration of the Progressive Wage Model’s (PWM) 10th anniversary.
The Progressive Wage Credit Scheme (PWCS), introduced in Budget 2022, will also be enhanced, with more details set to be revealed in Budget 2024. This scheme has been instrumental in supporting wage increases for eligible resident employees, with around S$1 billion disbursed in 2022 alone, benefiting 345,000 workers. For 2023, the government raised its co-funding share to 75% to further assist employers in increasing wages for their lower-wage employees.
The LQS, which currently stands at S$1,400, is also under review to ensure wages for lower-wage workers remain competitive. Since September 1, 2022, companies employing foreign workers must meet this threshold to qualify for relevant work permits and S Pass quotas.
Industry stakeholders, including the Singapore Computer Society, have raised concerns that an increase in the LQS could lead to higher labor costs, particularly for small and medium-sized enterprises (SMEs). However, they also noted that this could drive businesses to invest in automation and productivity improvements.
Additionally, a new Progressive Wage Portal has been launched to help lower-wage workers verify if their pay aligns with the PWM and LQS standards, ensuring greater transparency and compliance.
