Hiring Glossary
Foreign Worker Levy is a mandatory levy imposed by governments on businesses that employ foreign workers within their jurisdiction. It serves as a mechanism to regulate the employment of foreign nationals, encourage the hiring of local talent, and fund initiatives aimed at developing the local workforce.
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As a business owner or human resources manager, you may come across the term "foreign worker levy," which refers to a fee imposed by certain governments on employers for each foreign employee they hire. This levy serves as a mechanism to regulate the number of foreign workers in the country and encourages employers to prioritize hiring local talent. Understanding the foreign worker levy is important because it directly impacts labor costs and compliance with local employment regulations.
For example, in Singapore, employers are required to pay a monthly foreign worker levy for each Work Permit holder they employ. The levy rates vary depending on the industry and the skill level of the worker. Employers must manage these levies carefully to maintain compliance and control operational costs.
Foreign Worker Levy is a financial obligation imposed on employers who hire foreign workers, typically calculated on a per-worker basis and payable to the relevant government authorities. The levy aims to regulate the influx of foreign labor, safeguard the interests of local workers, and mitigate potential strain on public services and infrastructure.
Foreign Worker Levy plays a significant role in:
Foreign Worker Levy rates vary depending on factors such as the type of industry, employment sector, and the nationality and skill level of the foreign worker. Governments may adjust levy rates periodically in response to changing economic conditions, labor market dynamics, and policy objectives.
Certain categories of foreign workers may be eligible for exemptions or concessions from the foreign worker levy, such as:
Employers are responsible for complying with foreign worker levy regulations, which may include:
Employers can optimize their management of foreign worker levy by:
Foreign worker levy is typically calculated based on factors such as the type of industry, employment sector, and the nationality and skill level of the foreign worker, with levy rates determined by government regulations.
Yes, certain categories of foreign workers may be eligible for exemptions or concessions from the foreign worker levy, such as highly skilled professionals, sector-specific workers, and participants in government programs aimed at promoting local employment and skills development.
Non-compliance with foreign worker levy regulations may result in penalties, fines, legal sanctions, and reputational damage for employers, including potential restrictions on future hiring of foreign workers and adverse impacts on business operations.
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ABOUT THE AUTHOR
Milani Notshe
Milani is a seasoned research and content specialist at Playroll, a leading Employer Of Record (EOR) provider. Backed by a strong background in Politics, Philosophy and Economics, she specializes in identifying emerging compliance and global HR trends to keep employers up to date on the global employment landscape.
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