Firstly, all entities and individuals who are engaged in recruitment agency activities in Singapore need to apply for the employment agency license. This is irrespective of whether the agency is based in Singapore or abroad and whether it deals with jobs in Singapore or abroad.
Secondly, depending on the profile of the candidates that an recruitment agency works with, it can choose to apply for a global license or a selective license. The selective license is designed for recruitment agencies that place local or foreign candidates who earn a basic monthly salary of more than S$4,500. The blanket license is for all other placement agencies that are not eligible for the selective license.
While in the majority of cases a recruitment license is required, here are a few situations in which companies may be exempt from applying for a license:
The following are the main requirements for setting up an employment agency in Singapore.
First, you must register a Singaporean company. Therefore, you must incorporate a Singapore company and select the appropriate business code (SSIC code) for the type of recruitment activities you are undertaking.
Secondly, you must establish a business office. In particular, the company must establish an operational business office. You must necessarily seek approval from the Urban Redevelopment Authority of Singapore in case you plan to make any changes to a building. In addition, prior approval from the Building and Construction Authority is required to post signs on your building. Finally, if you are planning to carry out fire safety works, approval from the Singapore Civil Defense Force must be obtained.
Third, you must apply for an recruitment agency license. Specifically, the company must obtain an employment agency license, either a blanket license or a selective license. This license is issued by the Singapore Ministry of Manpower. Finally, you should note that the license is only issued to legal entities and not to individuals.
The fourth requirement is to pay the security deposit. Companies that are issued a selective license must provide a security deposit of S$20,000 in the form of a bank guarantee, while companies that are issued a global license will have to pay a security deposit of S$60,000.
The fifth requirement is to obtain a certification from the staffing agencies. In order to work in a globally licensed employment agency, all employees, including key positions such as CEOs or directors, must be certified through the Employment Intermediary Certificate training. Therefore, certification is required prior to obtaining an employment agency license. Key position holders will be required to complete this 40-hour course while other employment agency staff will be required to complete this 32-hour course. One thing you should know is that certification for key positions is mandatory whether or not they are performing employment agency work. Conversely, other staff must be certified only if they are performing agency work. Finally, all employment agency staff, including key personnel, who perform employment agency work must be registered with the Singapore Ministry of Manpower and must be issued a standardized registration card.
The final requirement is the eligibility criteria for employment agency staff. Thus, staffing agency personnel, including key positions, must be either Singapore citizens, Singapore permanent residents or foreigners holding a valid Singapore work visa. In addition, he or she must be certified. In addition, the person must be free from bankruptcy and court convictions.
What is the application process for an recruitment agency license?
The first step in the application process is to submit an application form to the Department of Manpower along with the license application fee.
Secondly, the processing time for employment agency license applications is approximately 1 to 3 weeks. Then you will be notified by email and if your application is approved, a letter of approval in principle will be attached. After receiving the letter, you will need to submit the following documents in order for the license to be issued:
1. Obtain a bond in the form of a bank guarantee from a bank in Singapore. In order for the bank to issue you a bank guarantee, you must open a fixed deposit account for the said amount with the bank. The bank guarantee must cover 15 months from the start date.
2. In addition to the bond, the following documents will be required:
Then, once you have submitted the necessary documents, you should receive an email notification within approximately 7 days of submitting the documents that your application is approved. At that time, you will be required to make a payment of S$100 for the issuance of the license. The license will be mailed to the address indicated in the original application. The license is valid for up to 3 years from the date of issue and is renewable.
Thereafter, employment agencies are required to comply with the revised rules for employment agencies. The revisions include changes to fee caps and the introduction of a new fee reimbursement policy.
Employment agencies may charge their clients a fee, provided it does not exceed the cap. There will be no cap on fees charged to employers for services provided. However, the fee charged to the candidate selected for employment shall not exceed one month’s salary per year for the duration of the work permit or approved employment contract, whichever is shorter. The fee cap will cover all agency fees charged by employment agencies in Singapore, even if they are collected from candidates through an overseas recruitment agency. In addition, certain items are not subject to the fee cap, such as training fees incurred overseas, overseas medical examinations, and travel expenses to Singapore. Applicants are not required to pay for costs incurred in Singapore such as training or medical examinations as these costs are borne by the employer or recruitment agency.
If the employer dismisses the candidate within 6 months of starting the job, the employment agencies must refund 50% of the agency fee that was collected from the candidate. However, this rule does not apply if the termination is initiated by the applicant. The recruitment agency must reimburse the fee within 7 working days of the termination of employment or before the repatriation of the foreign worker.
Finally, errant and unlicensed employment agencies will face sanctions. A number of measures such as the introduction of new offenses or increased penalties for existing offenses came into effect on April 1, 2011.
