Committee of Supply – Head S (Ministry of Manpower)

Head S (cont) –

Resumption of Debate on Question [4 March 2022],

"That the total sum to be allocated for Head S of the Estimates be reduced by $100." – [Mr Desmond Choo].

Question again proposed.

The Chairman: Senior Minister of State Zaqy Mohamad.

The Senior Minister of State for Manpower (Mr Zaqy Mohamad): Mr Chairman, in his National Day Rally speech last year, Prime Minister Lee accepted the recommendations by the Tripartite Workgroup on Lower-Wage Workers. This refreshes the Government’s social compact with our lower-wage workers to better support them, provide stronger wage outcomes and for all of us to play a stronger role to create a more inclusive and cohesive society.

We have already made good progress in uplifting our lower-wage workers through efforts such as Workfare and the Progressive Wage Model (PWM).

In the last five years from 2016 to 2021, we have seen good wage growth across our workforce. Real median income of full-time employed residents has increased steadily at 2.1% per annum. In comparison, real income at the 20th percentile – our lower-wage workers – has risen faster than median at 2.7% per annum. This means that we are reducing the income gap even as we move up as a workforce.

Our moves to enhance wage growth in the PWM sectors and introduce the new Local Qualifying Salary, or LQS, provide us with further opportunities to narrow income inequality in the coming years.

In my speech, Mr Chairman, I will elaborate on the progress of the Tripartite Workgroup on Lower-Wage Workers recommendations, and how Progressive Wages and Workfare will continue to be the key thrusts in our efforts to uplift our lower-wage workers.

I will also elaborate on our efforts to strengthen HR capabilities, so that HR professionals are better able to support businesses.

With your permission, Chairman, may I ask the Clerks to distribute a handout detailing our efforts to support our lower-wage workers.

The Chairman: Please do. [A handout was distributed to hon Members.]

Mr Zaqy Mohamad: Thank you. The Tripartite Workgroup on Lower-Wage Workers report was released in August 2021 and outlines our recommendations for a refreshed approach and ambition for an inclusive and uplifting society.

We have seen good progress since the release of the recommendations. New PWM sectors, such as Retail and F&B, have been identified and negotiations are underway. We can expect to see significant progress in wage outcomes in the coming years for our existing PWMs in the Cleaning, Security, Landscape and Lift and Escalator sectors.

For example, from 2022 to 2028, entry-level cleaners will see a cumulative wage increase of up to 84%, to receive baseline wages of about $2,400 in 2028. The other existing PWMs have also shown similarly strong momentum, and you can find them in our factsheet; you will see significant increases across the various PWMs. They reflect the Workgroup’s commitment to narrow income dispersion between workers at the lowest 20th percentile and median and this will strengthen our social compact.

At the same time, our overarching principle continues to be that wages and productivity should rise in tandem. Hence, we not only want wages to rise, but we also want to see productivity increase, through upskilling of workers and through the transformation of businesses.

We have seen more Singaporeans joining sectors with the PWM, such as Security and Landscape, as wages and working conditions improve. For example, the employment of locals in the Security sector grew by an average of 5% per year, compared to 2015, which was before PWM was introduced. This is different from some other countries where broad-based minimum wages caused unintended unemployment. It is this sustainable progress that gives the Tripartite Partners confidence and the impetus to expand the Progressive Wage Model to cover new sectors and new occupations.

Starting in September this year, we will implement the new Local Qualifying Salary requirement, as well as the Retail PWM and the extension of PWM to cover in-house cleaners, security officers and landscape workers. This will be followed closely by our second wave of moves in March 2023, just next year about this time, when we implement the Food Services PWM and Occupational Progressive Wages. Overall, by early 2023, 234,000, or more than eight in 10 full-time lower-wage workers will be covered by Progressive Wages.

Given the competitive labour market, we are confident that the PWMs will continue to set the pace for the wage growth of our lower-wage workers. Hence, even when lower-wage workers who are not covered directly by any PWM should still see good wage growth, as their employers will likely have to adjust their wages to keep pace with the market and to retain them.

Beyond uplifting wages, we also want to encourage our employers to pay more attention to other aspects of the well-being of our lower-wage workers. Therefore, following the recommendation of the Tripartite Workgroup, I am pleased to now launch a new Tripartite Standard on Advancing Well-being of Lower-Wage Workers.

The Tripartite Standards (TS) are a set of good employment practices that all employers should implement at their workplaces. The new Tripartite Standard on Advancing Well-Being of Lower-Wage Workers will encourage employers to provide better workplace support for our lower-wage workers, focusing on areas of training and career development, to provide rest areas as well as care for their mental well-being, as mentioned by Mr Melvin Yong.

We recognise that our workforce has experienced significant disruptions to their jobs during COVID-19. Therefore, it is important that employers cultivate a healthy working environment. Minister of State Gan Siow Huang will elaborate on these efforts in her speech.

To strengthen our social compact, the efforts of the Tripartite Partners and employers alone are not enough. We must recognise that all of us have a role to play – all of us as consumers. It is in this light that the Tripartite Workgroup recommended establishing a new Progressive Wage Mark, or PW Mark, accreditation. We want to help individual consumers and corporate buyers easily identify progressive employers that are supporting lower-wage workers, and support these employers through their purchases.

The PW Mark will be launched in the second half of this year. Employers that pay at least the relevant Sectoral or Occupational Progressive Wages to eligible workers, as well as the Local Qualifying Salary to all other local workers, will be accredited with the PW Mark. For employers that have gone one step further to adopt the new Tripartite Standard on Advancing Well-Being of Lower-Wage Workers, they will be recognised with the PW Mark Plus accreditation.

To rally the industry to adopt the PW Mark, the Singapore Business Federation has agreed to help administer the PW Mark. The Government will do our part to lend strong support to the PW Mark. From March 2023, we will require all suppliers awarded Government contracts to be accredited with the PW Mark, starting with contracts with larger value. More details will be announced in the coming months. We encourage potential suppliers to apply and obtain the PW Mark early once it is launched.

Chairman, putting our Progressive Wage measures together, this increases our coverage of Progressive Wages further up to 266,000, or 94% of full-time lower-wage workers – put together, 94%.

As we significantly widen the coverage of Progressive Wages and introduce the new Local Qualifying Salary requirement, we recognise that the employers would need some transitional support to adjust to the changes in the immediate term. The Government has thus committed its strong support through the Progressive Wage Credit Scheme, or PWCS, which was announced by the Minister for Finance earlier.

To recap, under the PWCS, there will be two tiers of funding. First, the Government will co-fund the first two most recent years of wage increases given to resident workers up to a wage ceiling of $2,500, for a five-year period from 2022 to 2026. Co-funding will be at 50% in the first two years, 30% in the next two years, before tapering off at 15% in 2026.

With economic conditions remaining uncertain in the immediate term, the PWCS will also provide a second tier of funding to cover those earning between $2,500 and $3,000, for a shorter period of three years.

With PWCS, the Government is providing direct support to the firms as they adjust to the Progressive Wage and LQS moves. We want to encourage all firms, including those not in the PWM sectors, to provide wage increases voluntarily in the immediate term when the Government’s support is the strongest. We urge employers to use this period of support to also accelerate the structural transformation of their business processes. Employers must take the lead in improving firm-level productivity, so that wage increases will be sustainable for businesses, even when the support ends.

I thus agree with Mr Sharael Taha that employers must press on to innovate and digitalise. The Government is expanding the range of solutions under schemes such as the Productivity Solutions Grant and Advanced Digital Solutions scheme to support such efforts. Working in tandem with these schemes, I encourage our trade associations and chambers to play a key role in promoting innovation and digitalisation efforts, and share best practices.

Workers should also continue to take the initiative in upgrading their skills and applying these skills at work, be it to increase productivity or to take on new roles. This will help them continue to support business transformation and ensure that wage improvements are sustainable in the long run. Therefore, I fully support Mr Sharael Taha’s suggestions for encouraging lower-wage workers to upskill.

Today, the Workfare Skills Support scheme provides incentives to encourage lower-wage workers to upskill, through training allowances and a training commitment award. In 2020, MOM expanded the income qualifying criteria, and increased the amount of allowance and award. I hope that our workers will take the opportunity to upskill and improve their career prospects.

Moving on to the Workfare Income Supplement (WIS) Scheme, or what we know as Workfare for short. Workfare was introduced in 2007 to narrow income inequality; to help our lower-wage workers save more for their retirement; and to encourage our lower-wage workers to work regularly, whether it is for full-time or part-time work, depending on what best suits their circumstances. Fifteen years on, almost a million workers have benefited from over $8.6 billion dollars in Workfare payouts.

One worker who benefited from Workfare over the years is Mdm Timah Binte Mohamad Kasan. Being the sole breadwinner while raising two children was not easy for Mdm Timah. Workfare made it better for her and her family by topping up her income since 2007. In total, she has received over $34,000 cash and CPF top-ups from Workfare. This has helped her support her husband, who is unable to work and her children while paying off her mortgage for her 3-room HDB flat.

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Mdm Timah is also supported by other Government schemes. For example, she currently receives Silver Support payouts of $720 per quarter. She also chose to boost her retirement income via the lease buyback scheme and received a $30,000 cash bonus on top of the proceeds from selling part of the flat's lease. The support from Workfare has not stopped, Workfare will continue to boost her income for as long as she wishes to continue working.

Uplifting our lower-wage workers is a collective responsibility. As businesses and consumers pay our lower-wage workers better, the Government, too, will do our part. As announced by the Minister for Finance, the Government will be making significant enhancements to Workfare from 2023. Let me briefly recap the enhancements here.

Workers earning up to $2,500 a month will now be able to qualify for Workfare, up from the current qualifying income cap of $2,300. Workers will also need to earn at least $500 a month to qualify for Workfare. Members have debated this extensively. We understand and share your concerns.

But allow me to first clarify a statement that I made at the Budget debate about the number of Workfare recipients that would be affected by the new criterion. The 20,000 figure, as cited by Minister Tan See Leng, had already taken into account the expected wage growth from the PWM expansion and new LQS requirement. Our objective, in line with Workfare's overall design, is to nudge all our workers, part-time and full-time, towards more gainful employment so that we give them a higher sense of achievement. We also want to better target Workfare at those who need it, our lower-wage workers, those with lower household incomes and not casual workers doing vacation jobs, for example.

At the same, we will ensure that those deserving and in need, will continue receiving Workfare, by providing concessions for them. For low-income part-time workers who qualify for ComCare, they will continue receiving Workfare, even if they earn less than $500 per month. There are some who want to work more but are unable to do so, due to various personal circumstances, such as persons with disabilities (PwDs). They too, will continue receiving Workfare. In fact, PwDs will receive the highest tier of Workfare.

I hope this assures Members of this House that those who are in need and who are deserving of Workfare will continue to receive it.

Here, I wish to reiterate a point that Minister Tan also made at the Budget Debate – Workfare is not the endgame for these workers earning less than $500 per month. We need to help these part-time workers find jobs of the appropriate quality and quantity of working hours to earn at least $500 or more if they can. And we have a whole suite of employment facilitation programmes and initiatives, ready to assist.

Finally, we will increase the payouts. Older workers, like Mdm Timah, will continue to receive the highest Workfare payouts, of up to $4,200 a year or $350 per month. Workfare has supported our persons with disabilities (PwDs) for more than a decade and certainly they can do with some extra support. From 2023, with the enhancements, we will provide a stronger helping hand by placing all PwDs on the highest payout tier of $4,200 a year.

We recognise that our younger and middle-aged workers are also dealing with greater family and financial obligations. Many of them are taking care of both their children and their elderly parents, while still paying off their housing loan. This is why we will also be increasing Workfare payouts for them.

Mr Abdul Samad Abdul Wahab suggested to exclude overtime pay when assessing a worker's eligibility for Workfare. Overtime pay, together with basic pay and bonuses make up a worker's total income that will help support the worker and his or her family. As Workfare helps lower-wage workers by supplementing their income, looking at the total income earned by the worker enables us to better assess the additional support to be provided via Workfare. If we had only used basic salaries to determine who will qualify for Workfare, some workers with low basic salary but high overall pay may displace another worker with higher basic salary but overall, he does not get much more, that is all he gets. The worker displaced would have needed Workfare more but does not get it. But the worker with high bonuses gets Workfare. Therefore, you can see the challenges of why we go towards gross wages.

Mr Chairman, Workfare has supported generations of workers and helped them save more for retirement. We will now extend this same support to younger workers, like Ms Lily. Ms Lily is an anonymised name as she prefers for us to not use her real name. Ms Lily is turning 30 years old next year. She works at a pest control company. She bought a flat four years ago and is living with her six children and her elderly mother. She is current receiving a suite of Government support to help her with her household expenses, including financial support such as the ComCare Short-to-Medium Term Assistance and the MOE Financial Assistance Scheme for her school-going children.

From 2023, workers aged 30 to 34 like Ms Lily, many of whom are just starting their families or supporting elderly parents, can expect to receive up to $2,100 Workfare payouts a year. She is looking forward to the boost in income, which will be an additional source of help with her household expenses. She says that the Workfare monies will be used to pay her HDB instalments and buy school supplies for her children.

Chairman, these enhancements will apply to all lower-wage employees and self-employed persons (SEPs), regardless of occupation. As pointed out by Dr Shahira Abdullah, to qualify for Workfare, SEPs need to declare their incomes and make the required MediSave contributions. The need to meet CPF obligations is part of Workfare's eligibility criteria and applies to both employees and SEPs. Nonetheless, CPF Board does exercise flexibilities to help SEPs facing difficulties make their CPF contributions.

Overall, the enhancements will benefit more workers, over half a million lower-wage workers from 2023 will benefit from Workfare, up from 460,000 today. Progressive Wages and Workfare will continue to form the foundation of the Government's multi-layer support for our lower-wage workers.

Even as we roll up our sleeves and implement these moves over the next two years and beyond, I am reminded of our workers like Mr Mohammed Ali. In 2017, Mr Ali was an entry-level Security Officer, earning about $1,700 per month. As a worker earning less, he received some support from Workfare. Guided by the PWM's career pathway and with training support from Workfare Skills Support, he upskilled and took on new responsibilities.

Today, he is a Senior Security Supervisor overseeing around forty officers. He earns about $3,100 per month, an increase of $1,400 compared to when he first started. He has since graduated from Workfare as his income exceeds the current Workfare qualifying income cap. This is a good and intended outcome. While Workfare provided Mr Ali with income and training support when he needed it, Progressive Wages also offered a progression pathway to higher wages and better skills for workers like him. Mr Ali, I am glad, made the most out of it and I am happy to share that he has graduated from the Workfare scheme, as Progressive Wages has enabled him to earn more.

With the new recommendations for the Security PWM, Mr Ali will earn $3,550 per month in 2024. And by 2028, Senior Security Supervisors like Mr Ali will earn at least $4,430, a significant progress compared to $1,700 when he first started. Members may also be pleased to know that under the PWM, entry-level Security Officers will earn at least $3,530 by 2028.

Mr Ali’s story is also situated within the larger story of progression for his company, APRO Asian Protection. Spurred by the PWM and industry transformation efforts, APRO has adopted various tech-based solutions to increase their productivity and their value-add to service buyers.

Moving onto a separate but pertinent topic, HR plays a vital role in supporting our workers and businesses. I thus echo Mr Edward Chia, Mr Yip Hon Weng and Mr Patrick Tay's calls for companies to build up their HR competencies and capabilities.

The Institute for HR Professionals (IHRP) accredits and certifies HR professionals as well as guide their continuous professional development. To date, there are more than 5,000 certified aspiring and practising HR professionals who support one another developing and sharing HR best practices. IHRP also provides curated learning resources such as HR playbooks as well as facilitates peer-led Communities of Practice and networking opportunities. We encourage more employer and HR professionals to join this expanding network. MOM will also continue to work with NTUC, SNEF and the TACs to strongly encourage more HR professionals to be certified by IHRP.

Mr Patrick Tay also asked for an update on the Human Capital Partnership (HCP) programme. Since the launch of the HCP Programme in 2017, we have awarded the HCP mark to more than 600 employers, who employ over 210,000 locals, or about 10% of the total local workforce. We will continue to work with the Tripartite Partners to identify and recognise our progressive employers. Mr Chairman, allow me to recap some of MOM's efforts in Malay.

(In Malay): [Please refer to Vernacular Speech.] As Minister for Manpower has shared, MOM is committed to shape our manpower policies to enable greater opportunities for all and for us to progress as a vibrant nation.

Let me start by talking about our workforce policies.

Our foreign workforce policies are guided by our goals of a strong Singaporean core, complemented by a high-quality and diverse foreign workforce. First, we will ensure that Employment Pass (EP) and S Pass holders are comparable in quality to the top one-third of our local PMET and APT workforce respectively. The qualifying salaries and levies will be raised accordingly to meet this benchmark.

We will also introduce Complementarity Assessment Framework, or COMPASS, as part of the Employment Pass framework. COMPASS is a points-based system that holistically evaluates the complementarity of EP applicants. It will take into account; firstly, salaries of applicants relative to local PMET wages in their sector; second, the applicant’s qualification; third, the firm's nationality diversity; and fourth, the firms support for local employment.

We will also look at other factors like whether the candidate possesses skills that are in shortage or whether the firm supports our strategic economic priorities. In future, EP applicants must meet the EP qualifying salary, and also score sufficient points under COMPASS. Existing EP holders must also meet these criteria when their work passes come up for renewal.

So what does all these mean for our local workforce? COMPASS will take into account many more factors in the assessment of EP applications. Together with the requirement for a higher EP qualifying salary, locals can be assured that EP holders here are of good calibre, and not just because their salaries are lower than locals. With COMPASS, locals should also feel more assured that firms will be incentivised to improve their employee diversity and strengthen their support for local employment.

Chairman, we will also build on our existing efforts to uplift lower-wage workers. We will expand the PWM and implement a new Local Qualifying Salary (LQS) requirement. By early 2023, 234,000, or more than 8 in 10 full-time lower-wage workers will be covered by progressive wages. The Government is doing its part, through the Progressive Wage Credit Scheme (PWCS) which funds the wage increases of our lower-wage workers. We will also enhance the Workfare Income Supplement scheme, to provide higher payouts to all our Workfare recipients. Overall, the Government will spend $9 billion over the next five years on these two schemes.

(In English): Mr Chairman, to conclude, our suite of measures will benefit both lower-wage workers and businesses, and allow us to renew and strengthen our social compact. The Government will spend $9 billion over the next five years for the Progressive Wage Credit scheme and enhance Workfare. And this reflects this Government's, the PAP Government's strong belief and commitment to uplift our lower-wage workers and to build a fair and inclusive society.

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Our social compact must be one which everyone enjoys the fruits of growth and that no worker is left behind as Singapore progresses. We must be careful to not let our social compact be eroded by inequality, otherwise our society, including our businesses, will not function well and much less thrive. We have made significant progress over the last decade. And Mr Chairman, we will do even better in this decade in creating a more progressive and inclusive society. [Applause.]

Mr Chairman: Minister of State Gan Siow Huang.

The Minister of State for Manpower (Ms Gan Siow Huang): Mr Chairman, I would like to thank our Government Parliamentary Committee (GPC) Chair, Mr Desmond Choo, for painting very clearly the challenges that businesses and workers are going through and that are lying ahead of us.

Our workplaces have seen major changes amidst the COVID-19 pandemic. In these unprecedented times, we have had to adapt and be flexible. Working from home, which was not so common pre-COVID-19, became the default mode of work for many of us for the past two years. As our workers navigate uncertainty and stresses during this period, the importance of supporting their well-being has come into even sharper focus.

My speech will focus on how the MOM team will uphold inclusive and progressive workplace practices, so that everyone has fair opportunities to contribute and thrive at work.

Women have made significant progress in Singapore. The employment rate for women aged 25 to 64 has been growing over the past two decades and continues to grow from 73.2% in 2020 to 75.1% in 2021, despite the pandemic. As we prepare to celebrate International Women’s Day tomorrow, we should take pride in the resilience of the female workforce in Singapore.

While there is progress made, there is room for more women to be active in the workforce. I participated in the nation-wide Conversations on Singapore Women’s Development last year. A key concern raised amongst women was the need to help caregivers remain in or re-enter the workforce. We recognise that women carry heavier caregiving responsibilities at home. To manage the caregiving roles, some women work part-time with reduced pay or even leave their careers early.

I agree with Ms Janet Ang and Ms Yeo Wan Ling that one of the ways to enable more women to continue their careers is having access to flexible work arrangements. This can be in the form of flexi-time, flexi-place, or flexi-load. Flexi-work arrangements apply to men too and allow more balanced sharing of caregiving responsibilities between women and men.

The pandemic has underscored how flexible work arrangements can strengthen business continuity and resilience. As pointed out by Mr Yip Hon Weng, flexible work arrangements help companies better attract and retain talent. Flexible work arrangements also allow businesses to tap on a larger pool of workers including seniors and differently-abled workers, as suggested by Mr Sharael Taha.

Businesses recognise these benefits. In 2021, 73% of companies that adopted flexible work arrangements said they were likely to continue offering them post-COVID-19.

We applaud the many employers who have made the shift towards flexible work arrangements. Some have shown their commitment by adopting the Tripartite Standard on flexible work arrangements. Adopters are recognised as progressive employers that put in place HR practices for effective communication and implementation of flexible work arrangements. Today, one in four employees work in companies that have adopted the Tripartite Standard. And this coverage is steadily growing.

The Public Service has taken the lead by adopting the Tripartite Standard and I urge more companies to come on board. I agree with Mr Edward Chia, Ms Janet Ang, Mr Sharael Taha, Ms Yeo Wan Ling and Mr Yip Hon Weng, that we have made much progress in flexible work arrangements in the last two years and we must not lose momentum. Similar to the trend in other parts of the world, flexible work arrangements will become the norm of future workplaces.

MOM will work with our Tripartite Partners to see how we can sustain flexible work arrangements, even as the safe management measures are relaxed. On the idea of legislating flexible work arrangements brought up by Mr Louis Chua and Mr Yip Hon Weng, we should be careful not to take an overly rigid approach that risks creating a litigious workplace culture with more disputes, or inadvertently affecting the employability of the people whom we seek to help.

For countries, such as the UK and Australia with legislation that provide employees and caregivers the right to request for flexible work arrangements, employers can still reject the request on business grounds. To create real change on the ground in the next few years, our priority is to help employers overcome barriers in implementing and continuing flexible work arrangements. For some, the nature of business operations makes it challenging to offer flexible work arrangements and they lack the know-how to overcome these barriers. These concerns and hesitations are understandable, as different sectors will have different needs and circumstances.

As Ms Yeo Wan Ling and Mr Louis Ng have raised, work from home is not as practical for frontline work. Employers could consider other forms of flexible work arrangements, like flexi-shift scheduling, staggered work hours and job sharing, which offer workers alternative flexibilities.

The Singapore National Employers Federation (SNEF) has started training HR professionals to implement hybrid work and after-hours communication policies.

Separately, the Institute for HR Professionals (IHRP) has developed a playbook on hybrid workplaces to help employers and HR professionals implement hybrid work, as well as update their HR processes, fair appraisal of employees on flexible work arrangements. I encourage companies to make use of these resources that are available. We will be sharing more details on how we will ramp up provision of flexible work arrangements in the coming White Paper on Singapore Women's Development.

It is important to build mutual understanding and trust between employers and employees. That is why instead of taking a legislative approach for various workplace practices such as flexible work arrangements, after-hours communication, mandatory breastfeeding breaks, we first focus on equipping employers to find the right balance between supporting employees needs and business needs. "Take care of your employees and they will take care of your business" – these wise words are from Mr Richard Branson, founder of the Virgin group. I believe many employers here feel the same way too and will support employees' requests, if they are reasonable.

At the same time, employees need to demonstrate that progressive workplace practices help to improve staff morale, productivity and loyalty. Those who feel aggrieved and are not able to address their grievances within their companies, may approach TAFEP for assistance and advice. Members have also asked for further review of leave provisions. Mr Louis Ng suggested raising minimum annual leave entitlements, introducing parent care leave and increasing parental leave provisions, while Mr Gerald Giam and Ms Mariam Jaafar spoke about sick leave.

We regularly review our leave provisions and acknowledge the real needs underpinning the Members' suggestions, but increasing leave provisions should not be the default solution. We have been advocating the adoption of flexible work arrangements precisely because they are flexible and able to cater to all forms of individual needs. We should also recognise that there is a cost to increasing leave provisions and we must balance this carefully against what businesses can sustain in order to avoid dampening jobs growth.

On Mr Louis Chua's suggestion on a four-day work week. Members may wish to refer to the TAFEP website for information on how companies can implement such flexible work arrangements, including policy templates on four-day work week and case studies of companies that have successfully done so. And Mr Louis Chua perhaps may want to consider implementing four-day work week in his company or department too and share the useful insights with the rest of us.

On the issue of sick leave for employees on short-term contracts, we encourage employers to exercise flexibility in granting medical leave before the three-month mark. To attract manpower in a tight labour market, it is in the interest of employers to be flexible.

Ms Mariam Jaafar suggested that we do away with the need for employees to produce a medical certificate in order to take sick leave. The Tripartite Partners' current position is the employees should produce a Medical Certificate (MC) when utilising sick leave, this helps to deter malingering and maintain a more disciplined workforce. Nonetheless, the Employment Act does not prohibit employers from providing sick leave without MC and companies are free to do so as part of their talent attraction and retention strategies.

This pandemic is, however, an exceptional time. Tripartite Partners agreed that employees should not request MCs from workers who test positive for COVID-19, so as to alleviate the stress on healthcare workers and avoid compromising the standard of care of other patients who genuinely require medical care during this period.

Given our ageing population, challenges faced by our workforce in meeting caregiving needs of elderly family members will increase. Mr Yip Hon Weng and Ms Yeo Wan Ling asked how we could better support household's needs for domestic services, including caregiving. In 2017, MOM introduced the commercial Household Services Scheme (HSS) which allows HSS companies to hire more migrant workers to provide part-time home cleaning services.

HSS workers are deployed to multiple households on a part-time basis to provide selected households services. This gives households, especially those that need domestic help for only a few hours a day or a week, more options. To better help Singaporeans balance their work and family commitments, we will broaden the scope of HSS to include basic child-minding and elder-minding services. Households will be able to engage services of HSS companies to look after their children at home or provide some basic assistance for their family members in activities of daily living.

Mr Yip Hon Weng and Ms Yeo Wan Ling asked about the safeguards that the Government will put in place to ensure HSS workers are qualified to provide child-and-elder-minding services. Today, there are already private companies that provide such services. We will study the industry best practices as we expand the scope of HSS companies. MOM will also be conducting engagements with the stakeholders, such as households and HSS companies to work out the implementation details over the next few months. We aim to implement the HSS expansion in the second half of this year. Mr Chairman, in Mandarin, please.

(In Mandarin): [Please refer to Vernacular Speech.] To give households more options to meet their needs for domestic services, the HSS allows eligible companies offering domestic services to hire more migrant workers to provide part-time home cleaning services.

Given the growing caregiving needs due to our ageing population, and to better help parents to balance their work and family commitments, we are looking to broaden the HSS scope to allow participating companies to provide the basic child-minding and elder-minding services.

Households will be able to engage HSS workers to look after their children at home or provide some basic assistance for the elderly in activities of daily living. We aim to implement the HSS expansion in the second half of this year.

(In English): I will now touch on our efforts to enhance mental health and well-being of our workforce, an issue that Miss Rachel Ong and Mr Melvin Yong had raised. The Government has been working with our partners to roll out tools and resources to encourage companies to adopt mental well-being initiatives, for instance, the Tripartite Advisory on mental well-being at workplaces was released in 2020. Last year, the Workplace Safety and Health (WSH) Council expanded the code of practice on WSH Risk Management (RMCP) to explicitly cover mental well-being.

The expansion included examples on how employers can identify, evaluate and manage risk related to mental health at the workplace. This marks a significant step in recognising that workplace safety and health includes mental well-being, beyond physical injuries.

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In 2021, we launched iWorkHealth, a free, company-administered survey to help employers identify workplace stressors and improvement areas. There is also an Institute for Human Resource Professionals (IHRP) playbook on "Workplace Mental Well-Being” to guide HR professionals to support their colleagues as well as mental well-being talks and workshops by the WSH Council and the Health Promotion Board that employees can attend at little or no cost.

We still have some way to go ahead of us. Based on NTUC’s 2021 Special Report on Mental Wellness at the Workplace, 54% of employees were not satisfied with their companies' mental well-being initiatives. The Government will step up our support to help organisations become more progressive in adopting mental well-being initiatives. We are studying how Employee Assistance Programmes, which provide confidential counselling services to employees, can be made more accessible.

As raised by several Members of the House, there is growing demand for support for workers with mental health conditions. According to a recent Singapore mental health study, one in seven people in Singapore had experienced a mental health condition in their lifetime. We need to strengthen employment support for persons with mental health conditions so that they are not excluded from employment.

Persons with mental health conditions may need flexibility in their work schedules to continue with therapy or counselling while remaining in employment. For those who had to leave their previous jobs or even take an extended break from the workforce, they may need help with the job search process. Agencies, including the Institute of Mental Health, Singapore Association for Mental Health and Singapore Anglican Community Services, provide pre- and in-employment support to persons with mental health conditions and their employers.

Dawn is one of the individuals who has benefited from the support provided by the Singapore Anglican Community Services (SACS). Dawn’s bipolar condition started in her teens and she received counselling during her times in the University. A year into her job, she suffered a relapse. She found out about SACS’ Integrated Employment Services programme where she enrolled for training in conflict resolution, stress management and personal effectiveness. With support from SACS’ job-matching services, Dawn successfully gained employment in a full-time job and she has since remained in employment for more than two years.

Dawn’s story is a positive example of how some persons with mental health conditions manage to receive the right support. But we worry that some may not be referred to available employment support and some employers, through lack of awareness about mental health support and conditions, wrongly believe that it is too difficult for them to support employees like Dawn.

The National Council of Social Service (NCSS) is currently piloting an Employer Support Grant to incentivise employers to implement workplace adjustments for their employees with mental health conditions. We will study the effectiveness of the pilot and develop further plans to support employees with mental health conditions.

MOM will also work with other members of the Interagency Taskforce on Mental Health and Well-Being to strengthen the ecosystem. We will be engaging stakeholders and members of the public to get their views.

Finally, I wish to touch on workplace fairness, which Mr Sharael Taha, Mr Patrick Tay, Mr Heng Chee How, Ms Janet Ang and Mr Raj Joshua Thomas have raised. The pandemic has not stopped our efforts to foster fair workplaces. As announced recently, we have decided to take the very significant step of enshrining the Tripartite Guidelines on Fair Employment Practices in law. This move will help to manage longer-term anxieties over ageism and provide better protection for vulnerable groups. A wider range of penalties can also be imposed on errant employers, commensurate with their wrongdoing. To this end, we must put in place a robust system to deal with claims, while keeping it efficient for workers and employers. The Tripartite Committee on Workplace Fairness is deliberating these important matters and continuing to consult widely. The committee will report on its recommendations in due course.

To conclude, the COVID-19 pandemic has brought about many challenges and given rise to new stresses at the workplace. At the same time, it has created opportunities and stronger impetus for us to push ahead for changes to make workplaces fairer and more inclusive.

In his speech, Minister Tan See Leng spoke about sailing our ship into an even brighter future. The MOM team will do our best to support employers and employees as they chart the path towards more progressive workplaces where everyone can thrive in. Together, we can sail our ship sustainably for many more years to come. [Applause.]

The Chairman: Senior Minister of State Koh Poh Koon.

The Senior Minister of State for Manpower (Dr Koh Poh Koon): Thank you, Mr Chairman. I would like to make a correction on my speech made last Friday at the COS and I quote:

"As mentioned in my response to the Adjournment Motion put forth by Mr Louis Ng last month and in response to Mr Leon Perera's question on easing of restrictions on migrant workers, let me say that migrant workers can visit recreation centres, or RCs, daily since September 2021." It should be December 2021. [Please refer to "Committee of Supply – Head S (Ministry of Manpower)" debate, Official Reports, 4 March 2022, Vol 95, Issue No 54, Budget section.]

The Chairman: Clarifications, please? Mr Desmond Choo.

Mr Desmond Choo (Tampines): Mr Chairman, I have two clarifications for the Minister for surfacing COMPASS as a framework to improve foreign worker complementarity. I would like to ask why is COMPASS limited to only workers who have a fixed monthly salary of below $20,000. How does it work hand-in-hand with the Fair Consideration Framework to prevent abuse for companies hiring workers above that pay range?

Second clarification: how can the HR community also play a role in supporting capability transfers and localisation efforts?

The Minister for Manpower (Dr Tan See Leng): I want to thank the Member Mr Desmond Choo for checking with us on the $20,000 bar. We took a practical approach on this. The EP holders at the $20,000 mark are typically senior management. They include C-suite personnel and specialists at the top of their field. This is especially so in certain sectors, including even some of the SMEs. They would most likely have gone through even more selective hiring processes to be appointed in their company since these roles typically require very specific capabilities or skillsets. Regardless of these exemptions, firms are expected to practise fair hiring and also to develop their own local talent pipeline. More importantly, our focus is to continue to help Singaporeans rise to the top by enabling them to compete strongly.

Just like the qualifying salaries, this $20,000 exemption bar is also not carved in stone and we will review it from time to time. As an aside, we actually look at the number that would cover local PMETs and we find that this is the level at this particular point in time, that COMPASS would cover quite a high majority of individuals. Hence, the bar, at this point in time, is at $20,000.

In terms of the HR community playing a role in supporting capability transfer and localisation efforts, we work closely with the community, whether it is Singapore Human Resources Institute (SHRI) and IHRP, and beyond that, with companies, trade chambers and so on. We exhort them to encourage HR managers to undergo courses to continue to keep themselves updated with regard to our policies and the improvements towards our framework, whether it is the Fair Consideration Framework to now, the new COMPASS that we are going to roll out.

And we believe that for those companies that have a very progressive and forward-looking vision in terms of improving their workforce, we will not hesitate to roll out schemes to support them to transform because, at the end of the day, our focus is raising the quality of the EP holder, to the top one-third in the local PMET space. Of course, we believe that, with that, we will be able to uplift our entire workforce to compete globally and also not just develop and grow our own timber, but to be complemented by foreign talent in those areas that we have a need for.

The Chairman: Mr Yip Hon Weng.

Mr Yip Hon Weng (Yio Chu Kang): Thank you, Mr Chairman. I have two clarifications for the Minister. One, will the transparency of the COMPASS framework allow employers to game the new system and, two, would the new COMPASS framework allow for more EP holders into Singapore?

Dr Tan See Leng: Perhaps I can answer the Member's second question first. COMPASS is an additional stage in the entire EP application process. So, in no way will it loosen our current EP framework. The fact that the majority of our existing EP holders pass COMPASS is an encouraging one. And COMPASS affirms the value they bring. It instils the discipline on such firms to continue to select complementary candidates, uphold diversity and also support local employment.

So, COMPASS is an added framework on top of the first stage, which is the EP qualifying salary. There are and there will be some firms which do not pass COMPASS. These include firms that make a habit out of hiring EP holders not due to their high calibre or skills but based on the convenience of networks, such as an old boys' club, and without taking heed of our calls to develop the workforce. COMPASS ensures that these firms cannot simply carry on with their status quo and they must fundamentally relook their hiring practices.

As far as the gaming itself is concerned, we will strengthen our enforcement process. We will have in place strong governance measures to guard against any dishonest attempts to game COMPASS. Today, we already have processes to enforce against fraud for criteria considered in our current framework, such as salary and qualifications. Similarly, we will also develop processes around additional criteria, such as the shortage occupation list. And the necessary verification processes upon which we look at the educational qualifications criterion will also be put in place. And, of course, employers certainly will not be able to get away with changing the job title to claim bonus points.

We have spent many, many weeks and months deliberating this framework. Two of the criteria which concerns the firms are, I believe, a couple of firsts that we have achieved as a nation. My exhortation to all employers is to support us, strengthen and work with us collectively, as a country, as an economy, as a nation, to build this complementarity and to build our local workforce to compete globally.

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Having said that, it is not our intention, but we will not hesitate to take employers to task if they are found to have falsely declared information to get the EP application approved. And we have embarked on a fairly seamless process in terms of data analytics and we will be able to pinpoint and triangulate this.

The Chairman: Mr Patrick Tay.

Mr Patrick Tay Teck Guan (Pioneer): Sir, I have two clarifications for the Minister. First, under the new COMPASS framework, what constitutes top-tier institution and at what level and if qualification needs to be relevant to the job that is going to be performed? And the second clarification is, besides qualifications, does MOM evaluate the quality of these candidates to determine if they are, indeed, high-quality talents that complement our local workforce?

Dr Tan See Leng: I thank Mr Patrick Tay for highlighting this point. Today, qualifications from the top-tier universities remain a fairly useful standardised measure of a candidate's quality and competency levels. Other factors such as relevant working experience are more subjective and are more difficult to assess at-scale.

Qualifications is one criterion under COMPASS. The description of the top-tier universities as available on the MOM's website. They do not just involve and include universities, they also include top-tier technical and vocational institutions as well.

A firm can still hire a candidate with no degree-equivalent qualifications if they perform well on other criteria. In fact, under COMPASS, there is greater flexibility. As a candidate without a degree-equivalent qualification can still qualify for the EP if the application scores well on the other criteria. As I have said earlier on, there are vocational institutions which are highly recognised in specific fields that can be included in the list of top-tier institutions. MOM will work with other sector agencies to recognise professional certifications that are well regarded by the industry. I hope that answers your question.

The Chairman: Mr Louis Chua.

Mr Chua Kheng Wee Louis (Sengkang): Thank you, Chairman. I have just got two clarifications.

The first is regarding the own account workers' welfare cut that I filed on the gig economy workers. I just wanted to ask if efforts can be done to ensure that they at least earn a fair wage in terms of reference to locals working part-time earning at least $9.00 per hour as per the LQS, given that these workers are not really in control in terms of their earnings power and are subject to all these incentives?

The second is in relation to the cut on the Lifetime Retirement Investment Scheme (LRIS). My question is whether or not the Expert Investment Council has completed its work and whether the Government still intends to roll out the LRIS. The reason being if you look at where the global markets have been since August 2016 when the recommendations were put forth, they have been up 67%, so this delay does have real cost and opportunity cost to our members in terms of their retirement adequacy.

Dr Koh Poh Koon: Sir, I will take the first clarification from Member Louis Chua about the equivalent of minimum wage for gig workers in the platform economy. The whole definition of a gig worker is that they have the flexibility to work as many hours as they want, whenever they want and with whichever platform they want.

So, it is very hard for us to then decide what would be the minimum wage that they can earn if they do not clock certain minimum number of hours. That is the flexibility that is inherent in the nature of the work. We must recognise that it is difficult for us to set that.

The market, of course, can decide at some point but in our work looking at the platform workers, we are specifically working at three areas, which are the housing and retirement adequacy, basic workplace protection against injuries, and some of these payment-related algorithms or wage-related outcomes could well be left to the third part of the work, which is on representation by either a body of platform workers; or the unions as a voice for the workers to seek better compensation and remuneration.

Mr Chairman: Mr Liang Eng Hwa. Yes, Minister.

Dr Tan See Leng: Mr Chairman, may I answer Mr Louis Chua's second point. Just to reassure the Member, we are indeed still evaluating. There has been a black swan event that has happened within the last two-and-a-half years and, given the current volatility and the crisis in Russia and Ukraine, if we had taken on certain positions just prior to this in, say, 2019 and so on, we would have been quite badly affected. So, I think that when it is ready, we certainly will come back and update everyone in Parliament. Thank you for your patience.

The Chairman: Mr Liang Eng Hwa.

Mr Liang Eng Hwa (Bukit Panjang): Thank you, Sir. I thank the Minister for his assurance that MOM will be very watchful of companies who will game the system and I am referring COMPASS. So, can I further ask Minister, under this framework, if the employer were to meet all the requirements under COMPASS, is MOM obliged to give the EPs? And if that is the case, will that lead to a situation where the total number EPs issued would be even higher than before?

My second question is to Senior Minister of State Koh. I am really happy that Senior Minister of State is going to continue the Skills and Future Centre at the 24 HDB hubs. We have one in Bukit Panjang and the residents are really grateful for the convenience and advisory provided there. So, can I ask the Senior Minister of State whether would the centre go further to beef up capabilities to do more local job-matching and with the intent to bring back or facilitate stay-at-home mothers or the seniors to rejoin the workforce?

Dr Tan See Leng: I will take the first question and Senior Minister of State Koh will take the second point.

I thank Mr Liang for his thoughts on whether this will increase. We have not, in our considerations, decided on setting a quota or number for the EP framework because EP holders are meant to be the top-tier in terms of all our work pass holders. Our design of COMPASS is, as it has arisen as an acronym, the "C-O-M-P" part stands for "complementarity" and the "A-S-S" stands for "assessment". For us, the complementarity is what is most important.

We are trying to make this framework a very highly differentiated system. A set of criteria which allows us to titrate, to be able to right site and continually uplift our level of competitiveness vis-a-vis globally.

Our aspiration is to be a global city, brimming with opportunities for our Singaporean Core, continue to provide opportunities for our young. But we are also cognisant of the fact that with the multiple disruptions, the pace of the disruptions, the accelerated change and transformation that is happening around the world, it behoves us to now move into a system where every EP holder coming, every foreigner coming in, will have to pull his weight in working, complementing our locals, at the same time supporting and driving our economy.

The long answer to his question is that we do not have an aspirational target in terms of a fixed number of EP holders. As long as the economy continues to grow, as long as it continues to uplift all of our Singaporean Core in terms of their skillsets, their competencies and, most importantly, their take-home wages, I think the framework will be one which is going to help us to continue to do so.

Having said that, notwithstanding, the criteria being where they are today, as I have shared earlier to the Member of Parliament Mr Desmond Choo's point about setting this $20,000 exemption, it is not carved in stone. As long as the general economy and industry can accept and be able to stomach, we will continue to improve this framework.

So, I hope that the Member can take away that this is a very highly differentiated framework that we are trying to achieve for all of our Singaporeans.

Dr Koh Poh Koon: Sir, in response to Mr Liang Eng Hwa's question, as of end December 2021, the SGUnited Jobs and Skills Centre assisted more than 24,000 jobseekers. Let me explain that these 24 centres are an extension of the five main centres that are distributed around the island, run by WSG and NTUC's e2i. They are actually forward-deployed nodes, to be more embedded in the heartlands to allow easier access by many of our heartlanders who are jobseekers as well.

In that sense, the main career centres curate all the jobs that are available, including those on the MyCareersFuture portal but, at the same time, as the main centre looks at the jobs that are put onto the market, they do curate them according to the vicinity of each of the forward-deployed centres and push out these job lists to the centres as well. For jobseekers who are probably within one of the nearer centres when they look for jobs, the centres can also recommend jobs that are closer to where the jobseeker stays so that it helps to facilitate some of these part-time work, or for people who may have mobility issues who want to work closer to home. So, I want to assure Mr Liang Eng Hwa that this is already being done today.

The Chairman: Mr Gerald Giam.

Mr Gerald Giam Yean Song (Aljunied): Sir, I have clarifications on COMPASS and the low-wage workers.

Will the shortage occupation list factor in both occupation and industry? For example, we may have a shortage of software developers in general, but not necessarily software developers in the financial services industry. And if such a distinction by industry is not made, MOM might be making it easier for companies like banks to hire foreigners without necessarily improving the opportunities for talented Singaporeans?

Secondly, does MOM already use the COMPASS framework internally for evaluating EP applications? If so, does the Minister expect that the outcomes in terms of the foreign-local talent mix in companies to remain largely unchanged, moving forward?

On the national diversity attribute of COMPASS, can I understand if MOM sees some concentration risk in having too high a percentage of any one foreign nationality in a firm? If not, what is the policy intent of this criterion?

And lastly, on the wages of low-wage workers, I know that by 2023 about 6% of full-time, low-wage workers will still not be covered by the PWM. Who are most of the workers in this group and does MOM intend to eventually extend PWM to all of them so that every Singaporean would be able to receive a decent minimum wage on their work?

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Dr Tan See Leng: Let me try to categorise Mr Gerald Giam's questions. I think to his first point in terms of whether COMPASS was from the FCF. COMPASS has actually taken into consideration the many months of data analytics, in terms of the hiring patterns, based on diversity, based on qualifications, salaries and also the concentration of PMETs within the firm, to come up with a fairly nuanced framework.

The fact that the vast majority of the companies actually passed when we put them through the COMPASS framework is actually a testimony to the fact that many companies for the past many years have been very progressive, very responsive and very nimble to the needs of our economy.

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As far as the diversity itself is concerned, it is a function also of the ability of the company to access the skill sets based on the individual sector. So, let me put it across in a perhaps, in a more illustrative way. For those that are in IT, particularly when you deal with a lot of cybersecurity, artificial intelligence and very advanced deep machine learning, even with deep-tech itself, depending on the sources where this group of skill sets are developed, you are not able to completely assume that you are able to get these skill sets from all around the world. Hence, we designed it to be such that in those areas that we have shortage of, and the fact that when we decided to pivot into the Industry 4.0 roadmap, we therefore needed to complement these gaps. So, when we took all these into account, we felt that this is what is needed for our economy to get to the next step.

The exact details, going into the granularity of why we want to do the cut-off at the various benchmarks, I think I have already explained it before in my speech. I hope that sort of gives the Member some insights into the thinking behind it.

What was your third point?

Mr Gerald Giam Yean Song: My third point was asking about the national diversity criteria inside COMPASS. What was the thinking behind that? Is it because MOM sees certain concentration risks in having too many people, too many employees from one nationality in the organisation? If not, what is the reason for including that?

Dr Tan See Leng: The nationality diversity consideration was also the result of making sure that we diversify our risk in terms of our dependency on the source of talent itself. To a certain extent, it is also guided by the current pandemic that is still ongoing. When certain restrictions came about, we were not able to let this group of EP holders travel freely back to their home countries to visit their relatives and come back. So, taking all of these into consideration, taking into account our various needs, we came up with a very nuanced approach in terms of the framework.

In fact, there are many foreign media articles out there that claim that we have become extremely unattractive because of the fact that many of these EP holders could not come back. And actually, it is not because of the fact that we did not allow them to come back. It was just because of public health border controls that we were not able to bring them back here to work. So, with that, this framework, to a certain extent, was also influenced by that.

The Chairman: Mr Zaqy Mohamad.

Mr Zaqy Mohamad: I thank the Member for his question on lower-wage workers and recognising that the Government has worked hard to cover 94% of our lower-wage workers with our progressive wage moves. On his question on the remaining 6% of lower-wage workers not covered, what their profiles are like. Actually, for the majority of them, they are already earning $1,400 and above. I think more than half are earning $1,400 and above, even though they are not covered by progressive wage moves, they are already earning that. But the question would more be, what are the exclusions and why did we exclude this group. But really, if you look at most minimum wage systems around the world, there are exclusions. In our case, we found that many of them are actually small businesses with less than 10 persons and most of these are actually micro-SMEs in your heartlands, typically your mom-and-pop shops.

What we can we all do? Well, in our estates, I think we probably know many of them, mom-and-pop shops who employ their own family members sometimes to help them out and one way we could do is to support in our Progressive Wage Mark. I hope that in Aljunied and Sengkang, you can also encourage many of these merchants, mom-and-pop shops to come on board the Progressive Wage Mark and say yes, please support and pay our workers more, and we will be happy to give you the Progressive Wage Mark if they do so.

These are ways in which I think there is moral suasion. But overall, if you look at where we are in terms of the kind of wage growth that you are expecting for the other PWMs shared here, ranging from fifty-plus percent to eighty-plus percent wage growth, for the vast majority of our lower-wage workers, that would also set the tone and drive competition in terms of the labour market at that level, and perhaps for such merchants, when they need to retain or pay their workers better, I think this is where their workers, too, will start comparing benchmarks in other sectors which are paying far better.

So, to that extent, rest assured, for this set of workers, they will still get Workfare and other benefits, whether it is Silver Support and so forth. Back to your question, what are their profiles, they are typically your micro-SMEs in the heartlands and typically family businesses too.

The Chairman: Mr Abdul Samad.

Mr Abdul Samad (Nominated Member): Chairman, I thank Senior Minister of State Zaqy Mohamad for sharing regarding the Workfare Income Supplement. I would like to enquire more clarifications for Senior Minister of State Zaqy Mohamad. My understanding of the $2,500 is actually basic salary plus allowances. Today, maybe it is my first time, or just maybe it is my ignorance, that it has to include bonuses. That means, every year, that worker cannot be earning more than $30,000. If he or she earns more than $30,000 annually, hence he or she does not qualify for the Workfare Income Supplement.

Next question. Why I ask to exclude overtime pay, I believe the Government and us as a society want to help those low-income, right? So these low-wage workers, why do they actually need to do the extra overtime work to actually supplement the cost of living daily? So, I hope while today the Government, as Senior Minister of State has explained, that they have to include, moving forward, can we really explore? Because someone that needs to do overtime, he wants to earn that extra income to meet the cost of living and also he is spending time away from his family. Do we actually want to take that into consideration by excluding overtime pay? Thank you.

Mr Zaqy Mohamad: I thank the Member for his question. In my speech earlier, I did explain why we do so. In fact, moving forward, that is why we are also moving all our PWMs towards gross wages to include the full package, not just overtime pay but also allowances. Why do we do so? We certainly want to ensure that we support our lower-wage workers well and really, these are the bottom 20%. So, for example, if you have a worker earning, say, $2,400 base, but his overtime pay adds up to $3,500 or even $4,000, then that does not qualify him as a low-income technically, because the real income that he gets home is much more than what lower-wage workers are getting.

So, our target is really the bottom 20%. If you look at Workfare, we push it slightly above that to cater for wage growth in the coming years and what we hope is to continue supporting lower-wage workers at that level. So, imagine this. A worker earning $2,400 for example, earns overtime pay and it goes much higher, compared to another worker who earns maybe $2,500 on the dot, looks more in terms of basic, but he does not earn any overtime pay because his sector, like administration, for example, that is all they have, hardly much overtime, but that is their base salary. So, is the guy earning $2,400 lower base with higher overtime pay, or the person earning $2,500 with no overtime pay, earning more? So, who is more deserving? In that sense, I think we also have to be very mindful that as we scope our schemes for lower-wage workers, we have to also be calibrated, at the same time also fair, to ensure that equity is maintained.

While I agree that many of our lower-wage workers do have the intention to earn more because some can do more overtime, for example. But in reality, we also have to take into account all their incomes as a whole, because I think we have to also be fair in terms of how we support our lower-wage workers.

The Chairman: Assoc Prof Jamus Lim.

Assoc Prof Jamus Jerome Lim (Sengkang): Thank you Chairman. Two clarification questions about the COMPASS framework. The first has to do with the scoring which currently gives 20 points default to firms smaller than 25 PMETs and I understand the premise behind that. The concern here is, of course, that it creates potentially a cliff edge effect for firms that are growing, such that it will be trickier for them to attain C3 and C4 to get up to 40 points, in the event that they want to grow and become a medium-sized firm. The concern here of course is that we create an artificial ceiling for firms, just like it is for small firms in Italy, where they intentionally just stay below the medium-size threshold.

My second question has to do with public data releases for the foundational criteria used to construct COMPASS. It would really help, I feel, if MOM will consider releasing data for sub-sectors to ensure firms and Singaporeans understand the reality of the given business environment. So, for example, for C1 in salary, we have data reported on gross monthly income from work at the median as well as the 20th percentile, but it will be useful to have it for the other sectors. Similarly, for C2 qualification, it would also be useful to understand the level of the highest qualification for our resident labour force and of those employed.

Dr Tan See Leng: I thank Assoc Prof Jamus Lim for his two points.

Well, I was an entrepreneur and I founded a firm and subsequently, I have also in due funded a couple of startups. I think that as a growing firm, the first thing that you would assess, for the founder or the entrepreneur, is to assess the market and to know what are the rules that they will operate under.

Having said that, I think the length of time that we have given for everyone to try to adjust to the framework itself, I think it is a fairly long runway. And the flexibility, the nimbleness, the responsiveness of the entrepreneur or the founder, is going to be quite paramount in ensuring that the firm will ultimately succeed. And I am pretty sure that there are many private equity affiliate professionals here amongst us, I think who would probably agree and testify to that.

So, on paper, it looks like as if it may cause a cliff effect, but I think in reality, given the nuanced approach, we believe that there will be enough time for people to adapt.

As far as the foundational criteria is concerned, we are going to start this on 1 September 2023. I think there is still time for us to see when it comes to the implementation, how we can actually get a set of nuanced data for everyone to be able to access and also to understand.

Assoc Prof Jamus Lim, the reassurance that I want to give to all startups, all SMEs, is that we are trying our best to support our own Singapore business ecosystem. We have the Singapore Global Enterprise Aspiration, earlier on, we have also shared the Enterprise 2030 vision and we do have multiple schemes available to support them.

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However, as we support them, as we use funding to support this group, the moment they get to a certain size, I think it is also the social compact and their responsibility to ensure that our Singaporean Core continues to be supported, to be brought along with them as well. So, it is not just about caring for our fellow Singaporeans, it is also about carrying them alongside with us as well. That is the intent of this initiative. I hope to get your support and your concurrence on this.

The Chairman: Leader of the Opposition.

Mr Pritam Singh (Aljunied): Thank you, Chairman. Just two questions. One really builds on the point that the Minister spoke about with regard to the support to build a strong Singapore Core, which is I think the substance of this initiative to review the EP qualifying criteria, exemplified by COMPASS. My question really picks off from a point I raised in the previous Budget, in the Committee of Supply debates last year about the Capability Transfer Programme. Just to enquire whether MOM considers in the renewal of the EPs going forward, a contribution of EP or their companies as a bonus criterion, if there has been a real transfer of skills to the Singapore Core? Whether that could be a part of the system structure in renewing EP holders, getting more EP holders into Singapore in areas there clearly is a need?

Because I think this really will address a long-term bugbear that is a perception nonetheless that somehow the foreigners not playing their part in contributing to the growth of the Singapore Core. If there is some data set, some matrix that can show that that is not the case and that actually there is a skills transfer that can be objectively assessed, I think this will be helpful for the programme.

Just another question, dealing with the EP framework. I understand today there are probably about 160,000 to 170,000 EP holders. Under the new qualifying criteria, how many EP holders today would not have been issued with an EP, under the new criteria? So, today, we have got a fixed number. I think it is about 166,000 based on last year's data. If the new scheme applied today, how many of these individuals would not actually be given their EP? I am just wondering if the Minister has that information.

My final point is a very short one. In his speech this morning, Senior Minister of State Zaqy Mohamad spoke about workers who earn less than $500. I think he made a clarification of the 20,000 figure but I did not catch what the new figure was. I do not believe the Minister shared it. I apologise if he did. But I would be grateful if the Senior Minister of State would share what that number actually is.

Dr Tan See Leng: The short answer to your first point about whether we can consider firms' support in terms of the local training, the transfers of skillsets, I think as we evolve the framework, we are not closed off to this thinking. At some stage, we will be able to continue to tweak the framework. Of course, we need to ensure that tweaking is not done in such a frequent manner that after a while, companies who want to look into investing into our country itself would think that we are having a series of moving goal posts. That is not the intent. So, the consistency, the constancy of this framework must be preserved.

However, at the fringe, anything that would strengthen it, to see how we can continue to improve our Singaporean Core, the transfer of skill sets, I think would be something that we can consider.

If you talk about comparing with the numbers today, how many would pass the framework, I think it is difficult to compare. Because in terms of, for instance, even at C1, notwithstanding the fact that we have a qualifying salary, even at C1, we measured according to the sector, what is the 65th percentile. So, I think, just off the cuff, finance in general, already you can see that there are two separate categories.

Suffice to say, from now till the next four to five years, when all the renewals of existing applications have been taken that into consideration, I think that the churn in EP holders would take care of whatever slack that exists together, even if the numbers do not meet the COMPASS framework that we put up today, the churn will take care of that.

In terms of the perspective, today, on any given year, our churn in EP holders is about 40,000 a year. So, that is the number of new applicants applying to join and people leaving. So, this churn, when put through COMPASS, will more than adequately take care of what we intend to do over the horizon. I hope that sort of gives you a picture of where we envisage we will move to.

Mr Zaqy Mohamad: I thank the Leader of the Opposition for his question. My clarification was basically to say that the Minister's speech quoting the 20,000 is the right number. Because the way I mentioned it, the way I clarified, some might interpret it as the number was different or lower. So, I thought just to clarify that the Minister's speech was the correct number.

The Chairman: Mr Sharael Taha. Keep it tight, please.

Mr Sharael Taha (Pasir Ris-Punggol): Thank you, Chairman. I am heartened to hear about the role of COMPASS to strengthen the complementarity of our foreign workforce. However, I would like to raise a few clarifications to the Minister.

The Chairman: I request that you could just to keep to one clarification and let others clarify.

Mr Sharael Taha: Okay, Chairman. So, the clarification will be – how will it be administered? Will the companies do self-assessments on an automated system or will every application be assessed by an MOM officer? How do we ensure that the process is effective but does not create a bottleneck in the recruitment process?

Dr Tan See Leng: I think in the interest of time, I will keep it short. COMPASS will not make the application process more cumbersome or lengthier. Much of the information required is already collected upstream in our databases such as the firm's workforce profile. We would be able to automate these processes so that the processing times will not be lengthened.

Earlier on, in my main speech, I have also shared that there will be a rubric that published on our website. Companies, before they even apply, they can actually score the potential candidate on the rubric. And they will also know before they even apply, what is the chance of this EP being approved.

Most of the businesses that we have spoken to, that we have gotten feedback from, appreciate the transparency, the clarity that COMPASS brings. I think this is a very important feature for us in designing and implementing COMPASS. COMPASS is meant to tell the world we are open, we are connected and we are welcoming of foreign work pass holders to come in and work as long as they can help uplift our economy, contribute to our workforce in uplifting and strengthening the Singaporean Core.

The Chairman: End of clarification. Mr Desmond Choo, would you like to withdraw your amendment?

Mr Leong Mun Wai (Non-Constituency Member): Chairman, Point of Order, Chairman.

The Chairman: Yes, Mr Leong Mun Wai.

Mr Leong Mun Wai: I would still like to ask questions.

The Chairman: Time is up. Thank you. Mr Desmond Choo, please proceed.

Mr Leong Mun Wai: Chairman.

The Chairman: Mr Leong.

Mr Leong Mun Wai: I said, there are still questions. The debate is not over when there are still questions.

The Chairman: Mr Leong, we are moving on. Thank you. Mr Desmond Choo.

Mr Desmond Choo: Mr Chairman, I would like to thank Minister Tan See Leng, Senior Minister of State Zaqy Mohamad and Senior Minister of State Koh Poh Koon and Minister of State Gan Siow Huang for their indulgence in their clarifications in preparing for this Committee of Supply. I also want to congratulate them for taking very bold but measured steps to build workers' compact but at the same time, keeping the workforce competitive. We know that it is a difficult policy tightrope for them to walk and they can be reassured of the tripartite support to their efforts.

At the same time, I also want to thank Permanent Secretary Aubeck Kam and his team. This will be his last MOM COS. He has done quite a fair bit to strengthen tripartite relations and we want to extend our appreciation for his efforts. With this, Chairman, I beg leave to withdraw my amendment.

Amendment, by leave, withdrawn.

The sum of $8,641,646,700 for Head S ordered to stand part of the Main Estimates.

The sum of $90,013,900 for Head S ordered to stand part of the Development Estimates.