In case you missed it, the Government is setting aside $1 billion to help more locals secure employment during this downturn.
Called the Jobs Growth Incentive (JGI), the initiative provides businesses with substantial salary support.
The support allows employers to bring forward their hiring plans and grow their local workforce over the next six months.
Eligible firms will automatically receive the payouts from March 2021 onwards, based on their CPF contributions during the six months.
So what does your boss need to know about the JGI?
It Benefits Both Employer and Jobseekers
The additional salary support would be helpful for businesses during this period of uncertainty.
Employers can make use of this incentive to expand their business and seize new opportunities that would otherwise have been impossible.
With employers more willing to take on new hires, it would mean more and better job opportunities for jobseekers.
There are three main criteria for employers to fulfil to be eligible for the JGI.
For one, firms looking to tap on the JGI must increase its local workforce between September 2020 and February 2021. After all, the idea is to create more jobs and opportunities for Singaporeans during this period.
Secondly, the increase in the local workforce must be in roles that pay at least $1,400 in gross monthly wages.
And lastly, the company must have been set up on or before 16 August 2020 to be eligible.
Qualifying Hires and What the Firm will Receive
Hires will be segregated into two main groups – those currently 40 years old and above, and those below 40.
For hires who are 40 and above, the firm will receive 50 per cent of their first $5,000 gross monthly wage for up to 12 months or a maximum of $30,000 for one year.
For hires who are below 40 years of age, the firm will receive 25 per cent of their first $5,000 gross monthly wage for up to 12 months or a maximum of $15,000 for one year.
It is worth noting that for the company to receive the incentive for the full 12 months, employers must continue to meet the eligibility criteria for that period.
It Encourages Retainment of Current Employees
The JGI is not a ‘fire-to-hire’ solution for employers.
The Government will adjust the company’s JGI payout if any local employee under the company’s employment before August 2020 leaves.
It is a component that aims to encourage employers to retain their local workforce while they expand on their operations.
The higher the number of local employees who leave the company, the higher the adjustment.
Its computation is calculated using the ratio of existing employees who have left the employer, to the total number of existing employees as of August 2020, or 5 per cent, whichever is higher.
Although that might sound confusing, it’s quite simple when you apply it.
Here’s an example.
If a company has 10 existing local employees and one leaves, the company will get a JGI payout reduction of 10 per cent. That is because one out of 10 employees is 10 per cent of the workforce.
However, if the company has 100 existing local employees and one leaves, the JGI payout for the new local hires will be reduced by 5 per cent, even though one out of 100 employees is 1 per cent of the workforce. That is because 5 per cent is the minimum adjustment that the Government will make.
Show Me the Money
As mentioned earlier, JGI is an auto-inclusion initiative, and eligible companies need not apply to receive the incentive.
The Government will commence the payouts from March 2021 onwards and will disburse them every quarter from thereon.
Download the “5 Things Bosses Should Know about Jobs Growth Incentive” infographic here.