Budget 2022: Foreign worker quotas cut for construction and process sectors

TO REDUCE the construction and process sectors' dependency on foreign workers and spur productivity improvements, the government will tighten the foreign workforce quota by reducing the dependency ratio ceiling (DRC) and replacing the man-year entitlement framework with a new levy framework.

The new policies will take effect from Jan 1, 2024 to give companies time to prepare, said Finance Minister Lawrence Wong during his Budget speech in Parliament on Friday (Feb 18).

The DRC will be reduced to 1:5, from the current 1:7, said Wong.

Meanwhile, the man-year entitlement framework will be replaced with a new framework that will encourage companies to support more offsite work and employ more higher-skilled work permit holders.

The Ministry of Manpower will provide more details on these foreign worker policy changes at their Committee of Supply.

Wong said the new policies are intended to "spur greater productivity improvements and support more manpower-efficient solutions" in the sectors.

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"This will help transform the sectors that have been more heavily dependent on foreigners," he added.

Wong emphasised that the new policy adjustments "apply mainly to the broad middle of the workforce" and Singapore remains open to talent from around the world.

"This is where we have Singaporeans doing the jobs, but we need to continually adjust our rules to ensure complementarity between our foreign and local workforce," he said.

Where there are "acute" skill shortages at the "higher end" of the workforce, Wong said Singapore will bring in professionals "with the right abilities".

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