Progressive Wage and Local Qualifying Salary


What is the difference between the progressive wages model and the local qualifying salary – Sally, F & B industry


Hi Sally,

Thank you for your question!

The progressive Wage Model (PWM) and Local Qualifying Salary (LQS) are both important frameworks in Singapore aimed at uplifting wages, but they serve different purposes and apply in distinct ways:

Progressive Wage Model (PWM)

Purpose: PWM is designed to uplift low-wage workers by setting out clear career progression pathways with corresponding wage increases.

Sectors Covered: It currently applies to specific sectors such as cleaning, security, landscape, lift and escalator maintenance, and retail.

Components:

Career Progression: Clear pathways for workers to advance in their careers.

Skills Development: Training requirements to ensure workers acquire relevant skills.

Productivity Improvements: Encourages employers to improve productivity to sustain wage increases.

Implementation: The wages are tied to job roles and skill levels, meaning workers earn more as they gain skills and take on higher responsibilities.

Local Qualifying Salary (LQS)

Purpose: LQS is used to determine the number of local employees (Singapore Citizens and Permanent Residents) who can be counted towards a firm’s compliance with the Foreign Worker Quota.

Amount: As of the latest guidelines, the LQS is set at $1,400 per month.

Qualification: Employees must earn at least the LQS amount to be considered full-time local workers to calculate the foreign worker quota.

Application:

Quota Calculation: Employers must meet the LQS for their local workers to hire foreign workers under the Ministry of Manpower’s quota and levy system.

No Career Progression Aspect: Unlike the PWM, the LQS does not directly relate to career progression or skills development.

Key Differences:

  • Scope: PWM is targeted at specific low-wage sectors and focuses on career progression. LQS is more broadly applied across all sectors for quota calculations.
  • Implementation: PWM includes wage increments linked to skills and career advancements. LQS is a flat wage threshold used for foreign manpower policy compliance.
  • Objective: PWM aims to provide structured wage growth and career paths. LQS ensures a baseline wage for counting local employees towards foreign worker quotas.

For more detailed information on these frameworks and how they might apply to your company, I recommend consulting the Ministry of Manpower guidelines and utilising the resources available through HRSINGAPORE.

I hope this clarifies the differences for you! If you have any other questions or require further assistance, please feel free to ask.

Best regards, HRSINGAPORE

P.S. Don’t forget to explore our HR Certification, HRLAW Seminars, HR Training courses, and HR Consultancy Services.


Which of the following statements about the Progressive Wage Model (PWM) and the Local Qualifying Salary (LQS) in Singapore is correct?

The Progressive Wage Model applies to all industries in Singapore: 11.76%

The Local Qualifying Salary sets the minimum wage for hiring foreign employees: 5.88%

PWM aims to raise wages through skills upgrading and productivity improvements: 76.47%

LQS is used to determine Employment Pass eligibility as part of employee contracts: 5.88%


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