Singapore's Ministry of Manpower (MOM) announced last week that they would be raising the levies imposed on employers of foreign workers.

These changes will be gradually introduced from July 2010 until July 2012 and will affect both holders of S Passes and Work Permits. Domestic Foreign Worker Levy will be unaffected.

The key features of the changes will be:

1. Increase in the S Pass and Work Permit levy rates - To better moderate employers’ demand for foreign manpower and to encourage investment in productivity;

2. Greater differentiation in levy rates between skilled and unskilled foreign workers - Encouraging companies that need foreign workers to employ better skilled and thereby more productive ones;

3. No change in Dependency Ratios, but higher dependency will attract higher levy rates - Maintaining companies’ access to, while at the same time encourages them to reduce reliance on, foreign manpower.