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Published: Thursday January 2, 2014 MYT 12:00:00 AM
Updated: Thursday January 2, 2014 MYT 8:44:41 AM

Labour costs could soar as much as 20%

THE double whammy of higher foreign worker levies and a manpower crunch could send labour costs in some sectors soaring by as much as 20% this year.

The hit will come on July 1 when companies in the services, manufacturing and construction sectors face levy hikes of between S$15 (RM39) and S$200 (RM519) for each foreign worker on staff.

“The tighter labour market and the full force of levy measures are going to make it a pressuring environment for companies,” said Kurt Wee, president of the Association of Small and Medium Enterprises.

The pain will be felt particularly in the building game. Monthly levies will increase to a record S$950 (RM2,465) for each lower-skilled foreign worker hired by construction firms.

OKP Holdings group managing director Or Toh Wat described the increase as “an all-time high”, and firms that hire more lower-skilled construction workers will be harder hit.

Or expects the company’s overall labour costs to go up by 10% to 20%.

Service sector firms like restaurants will continue to face “a tremendous labour crunch”, warned DBS economist Irvin Seah. — The Straits Times / Asia News Network

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