There’s no question that the need for employees in Singapore will not be dropping any time soon. Given the booming economy and high demand for incorporation on the island, many businesses have begun to seek out different methods of recruitment. One steady avenue to find the right candidates has been through employment agencies. These firms exist to recruit and target people to be hired by their clients. They serve as the middlemen between the employer and potential candidates. Many of these agencies target specific types of candidates, for example foreign employees, upper and middle management, and the like.
Before you can start up your own employment agency, you must first obtain an Employment Agency License as mandated by the Ministry of Manpower. The license covers all firms engaged in any type of staffing or recruitment activities – regardless of whether they are hiring locals or foreigners.
You need to be eligible in order to apply for an employment agency license. You can use the MOM self-assessment tool to check your eligibility.
There are two types of Employment Agency Licenses available. The types of license corresponds to the types of workers you can place. These are:
- Select License
This type of license covers a firm that hires candidates (whether local or foreign) that earn upwards of SGD 4,500 on a monthly basis
- Comprehensive License
This type of license applies to all other employment agencies that are not qualified for the Select License. All staff of the agency, including key management personnel must finish the course and receive a Certificate for Employment Intermediaries (CEI) before applying for this license. The course is about 40 hours long. There are sub categories of licenses within this category. They are:
- Comprehensive License (All)
Any type of workers
- Comprehensive License (Local)
Local workers only
- Comprehensive License (non-Foreign Domestic Workers (FDW))
Local or foreign workers except for foreign domestic workers
You may apply for this license on LicenseOne. The application fee for an Employment Agency License is typically S$400 and takes about 1-3 weeks to process before approval via email. An additional S$100 is needed upon approval for issuance of the license, which will then be mailed to your specified office address registered during incorporation. The license is available for 3 years of operation and can be renewed after such period. Once the license has lapsed, Ministry of Manpower representatives will issue a notice via email to renew the license for the next 3 years.
You should be aware of the 2 governing terms in the Employment Agency industry. They are:
- Fee cap:
Which is also the limit to the amount that can be charged to potential candidates for using your services. This cap exists to protect candidates. The fee cap is equivalent to the monthly salary being offered by employers to the candidates.
- Fee refund:
Applies when a candidate quits or is fired within the first 6 months of employment. At this time, the employment agency must refund 50% of the fee paid by the employer.
In order to renew a license, the employment agency must be found to have operated in good standing throughout the previous license’s validity. This means that there are no outstanding complaints filed against the company or any court cases pending with the judicial system. Likewise, the fee cap and fee refund policies were followed. The key personnel of the company must also not have any cases of bankruptcy or convictions against them.
It is compulsory for employment agencies to get a security bond before the employment agency license will be given to them. You may send a request to the MOM to calculate your deposit amount.
All staff of any employment agency, regardless of license type, must also register as personnel operating in any capacity as a recruiter or staffing officer at the Ministry of Manpower. A standard registration card will be issued to each individual. These individuals are only allowed to be registered under one employment agency at a time. A fee of SGD 160 will be charged per registration. Registration must also be completed again if an individual chooses to transfer to a different firm.