SINGAPORE: Foreign worker levies were raised in last year's Budget. All the changes would have been implemented next July.
Depending on the sector companies are in and how reliant they are on foreign workers, companies will pay between 250 and 750 dollars more in levies per worker.
To reduce dependency on foreign workers, companies are being urged to raise productivity.
In addition, they are encouraged to tap on older workers, back-to-work women, part timers and the disabled.
The Employment Act is also being reviewed in response to the needs of a changing workforce.
Phase one of the review is expected to be completed in 2013, and the second phase will likely commence in the last quarter of next year.
The labour movement wants the Act to be extended to cover the growing numbers of professionals, managers and executives (PMEs).
Some have urged the government to be more flexible and adjust foreign worker numbers according to business conditions.
Analysts warn there could be more companies that will shift elsewhere, downsize or even close down with the tightening measures.
Mech-Power is one of many local companies that has endured the labour crunch. It moved a large part of it operations to Johor to cope.
Cliff Loke, managing director of Mech-Power said: "Whenever we have an overload of work, we just put out a (recruitment) banner outside the factory and we get a lot of workers coming after us for the job. Also, the labour cost is much cheaper than in Singapore."
Acting Manpower Minister Tan Chuan-Jin indicated the pace of labour restructuring will also be a factor in tightening measures.
"We will work with companies to transit and we will look at the various measures in place and to see whether we will continue to tighten (foreign labour). So, a lot depends on demand," said Mr Tan.
"Will demand ease off? Will restructuring take place? So this is something we will continue to track and we will continue to effect these levers (in tightening labour) over time."
Policies are also being changed to improve the welfare and well-being of foreign workers.
Starting 1 January 2013, foreign domestic workers will get a mandatory day off.
Employment agencies said this can attract more foreign maids to work in Singapore.
"Singapore employers are very fearful of what the domestic workers are going to be doing on their (rest days). I think there's a fear factor they seem to have, but we need to trust the person who's working in our homes," said K Jayaprema, president of Association of Employment Agencies Singapore.
"What an employer can do is to guide these domestic workers. They can also look at skills upgrading. There're so many courses available for these domestic workers."
In November, 171 bus drivers from China went on strike. It was the first strike in 26 years in Singapore.
The drivers were unhappy about pay and living conditions.
The government considered the strike as an illegal one as public transport is an essential service and sufficient notice of the intent to go on strike is needed.
Observers believe Singapore's international reputation has not been dented.
"I think the long-term repercussion (of the strike) is quite minimum but should another episode happen, then I'm not very sure," said Assoc Prof Tan Khee Giap, co-director at Asia Competitiveness Institute.
To prevent such an episode from happening again, employers have been urged to review their grievance-handling procedures.
- CNA/xq
