A SCHEME to allow firms in the service sector to deploy foreign workers in multiple roles will begin on July 1, even as they get hit by a double whammy of higher worker levies and tighter quotas in the next few years.

To help them boost productivity and cope with reduced labour, the Jobs Flexibility Scheme for Productivity will let all services firms give foreign workers several different job scopes. This is not allowed now as work permits are for specific job roles.

Details of the scheme, which was mentioned in Monday's Budget statement, were given by the Ministry of Manpower (MOM) yesterday. It will consult the National Trades Union Congress and the Singapore National Employers Federation (SNEF) to draw up implementation guidelines for bosses. More details will be revealed in next month's Committee of Supply debate.

Yesterday, business groups welcomed the extension of the scheme - which was piloted in the hotel sector last October - to the whole services sector.

"This enables companies to use their manpower more efficiently instead of employing more foreign workers just to do a specific job," said SNEF executive director Koh Juan Kiat.

Association of Small and Medium Enterprises (Asme) president Chan Chong Beng, too, said the move will help firms boost productivity and give them flexibility.

The help is welcome, he added, given the harsh measures imposed on the services sector.

The sector's Dependency Ratio Ceiling - the maximum proportion of foreigners in a firm - will be cut from 45 per cent to 40 per cent on July 1.

The move will hit about 14,000 firms, or about 40 per cent of the industry, said MOM. But firms which are over the limit now can keep existing workers till 2015.

On Monday, Deputy Prime Minister and Finance Minister Tharman Shanmugaratnam described the cut as a "painful but necessary step" for a sector which has seen continued growth in foreign-worker numbers, and lagging productivity levels.

Monthly levies will also rise: By 2015, services firms will have to pay $450 to $800 for each unskilled Work Permit holder.

The services sector is also the only one to face tighter S Pass quotas. Now, such mid-skilled employees can form 20 per cent of a firm's workforce. But from July, they can make up only 15 per cent of the headcount - though existing S Pass holders above this limit can be kept until 2015.

But the staggering of the implementation of these measures is cold comfort to bosses facing labour shortages.

"Whether it's now or by 2015, I think it's hurting firms," said Asme's Mr Chan.

The Restaurant Association of Singapore said the levy hikes and quota cuts will be devastating: "We envision that growth and expansion in the industry will slow down with more businesses closing down, especially for budding entrepreneurs who find it difficult to sustain their businesses."