(Supplementary Question) Louis: Thank you, Mdm Speaker. Just one quick supplementary. Moving forward, will MOM consider requiring all companies who employ work permit holders to place a security bond or a deposit at MOM, which can specifically be used when companies ignore the Labour Court orders for compensation to the workers?

Mr Lim Swee Say (MOM): Mdm Speaker, currently, employers of foreign workers already have to place a security bond of $5,000 per worker. Last year, 115 foreign workers were owed salaries, unpaid and unresolved. Of that number, 28 of them were work permit holders with security bonds. We managed to get the security bond insurer to offer $2,000 to pay each of the workers. So what Member Louis Ng mentioned is effectively already in practice today.

Source: Hansard (Parliament of Singapore)

Louis delivered his budget cut on Mandatory Electronic Payment of Salaries

Louis: Sir, many employers of non-domestic workers continue to pay salary in cash. The only documentation that payments have been made is salary vouchers. However, salary vouchers are easily forged and might not tally with the cash amount paid. When workers lodge complaints and salary vouchers are disputed, it is very difficult for MOM to ascertain where the truth lies.

Will MOM consider making it mandatory to pay salaries to non-domestic workers through banks, creating an audit trail as to how much was actually paid? As we move into a cashless society, there is no doubt that all migrant workers will have a bank account.

Many states in the Gulf ‒ UAE, Kuwait, Qatar, Saudi Arabia and Oman ‒ have also implemented such a mandatory requirement. In addition, their laws require banks, payroll outsourced providers or employers themselves to certify monthly that full salaries have been paid, creating an early-warning system for the authorities. 

Mr Sam Tan Chin Siong (The Minister of State for Manpower): Mr Melvin Yong, Mr Kok Heng Leun and Mr Louis Ng asked about protections and measures in place for our migrant workforce, including electronic payment of salary, employment contract and recruitment practices. We are fully committed to protecting the well-being of our foreign workers.

There are laws and policies for areas including salary payment and local employment agency fees. By law, foreign workers are to be issued the Key Employment Terms (KETs) within 14 days of arrival. The KETs state clearly the employment terms including working hours, leave benefits and the salary amount. It is an offence under our law for employers to reduce the salary from what is stated in the In-Principle Approval (IPA) letter without the worker’s written consent.

To limit financial burden on workers, local employment agencies are also prohibited from charging foreign workers recruitment fees more than one month of their salary per year of service.

We also ensure that foreign workers know their rights and responsibilities, and we assist them proactively when they need help. We work with our partners, for example, the Migrant Workers Centre (MWC), to educate both workers and employers on the benefits of salary e-payment. The MWC also assists foreign workers with valid salary claims to seek employment.

Source: Hansard (Parliament of Singapore)

Wrongful or Unfair Dismissal That Will Be Heard by Employment Claims Tribunal

Louis asked the Minister for Manpower what constitutes claims for "wrongful" or "unfair" dismissal which will be heard by the Employment Claims Tribunal.

Mrs Josephine Teo (for the Minister for Manpower): Mr Speaker, the Employment Act (EA) provides remedies against two forms of wrongful dismissal.

The first form of wrongful dismissal involves dismissal on grounds other than poor performance, misconduct or redundancy. If the employer dismisses an employee because of his poor performance or misconduct, the employer must be able to substantiate his case.

The second form of wrongful dismissal involves pregnant employees whose contracts have been terminated without their receiving maternity benefits.

Both forms of wrongful dismissal claims will be heard by the Employment Claims Tribunals (ECT), after the EA is amended. 

Louis: Sir, the typical recourse for wrongful dismissal has been the notice period, the argument being that the only loss that one has suffered is the loss of not having given notice. So, can the Employment Claims Tribunals (ECT) also recognise damages that go beyond the notice period, so that we also recognise the mental and emotional anguish that one has suffered in such situations?

Mrs Josephine Teo: Sir, there are a range of remedies. It really depends on the facts of the case. It depends on whether the employer was able to substantiate the claims, and if he is unable to, the employer may be ordered to reinstate the employee, to provide compensation. And if the employer does not comply with the order, then he can also be prosecuted.

As to what the compensation should include, it is up to the Employment Claims Tribunal (ECT) to assess, and that will also depend on what was presented to the Tribunal by the claimant in terms of the range of losses suffered.

Louis: Can I just confirm that for wrongful dismissal, the Employment Claims Tribunal (ECT) can recognise damages that go beyond the notice period? They do not just compensate on the one or two months' notice that they were not given? 

Mrs Josephine Teo: It will depend on the claims of losses – in this case – that the employee puts up, and then the ECT will have to assess. I think it is very hard to say in the absence of facts of the case. 

Source: Hansard (Parliament of Singapore)

Electronic Payments for Work Permit Holders

Louis asked the Minister for Manpower (a) why are employers required to pay the salaries of S Pass holders electronically but not for work permit holders; and (b) how does the Ministry verify that the amount stated in salary vouchers tally with the cash amount paid to workers.

Mr Sam Tan Chin Siong (for the Minister for Manpower): Sir, under the S Pass framework, there is a minimum salary requirement specified by the MOM. Electronic salary payments were therefore made mandatory for S Pass holders to ensure that their employer has documentary proof of meeting the minimum salary requirement in order to enjoy the S Pass privileges.

MOM did consider making electronic salary payments mandatory for work permit holders. However, during our consultations with workers, employers and unions, some work permit holders expressed a preference to receive their salaries in cash as it is more convenient for them. Some work permit holders also gave feedback that they would face difficulties in maintaining a minimum account balance of $500 in their bank account to avoid being charged a fee by the banks.

On the other hand, small and micro SME employers like family-run shops or mom-and-pop shops, who employ work permit holders have also expressed difficulties paying salaries electronically as they would need to incur additional administrative fees and resources to do this.

Nevertheless, our laws already require employers of work permit holders to pay salaries electronically if requested by the workers. Today, two-thirds of these workers receive their salaries electronically. To further encourage the adoption of e-payment of worker salaries, MOM introduced an online facility in 2014 to facilitate employers opening bank accounts for their work permit holders when applying for their work permits.

In addition, MOM also mandated the issuance of itemised payslips and written key employment terms since April 2016. Workers should ensure that they are paid the amount stated in their salary vouchers. And when there is any discrepancy, workers should seek clarifications from their employer and not sign on the salary vouchers. If workers are not able to resolve such disputes with their employers, they should seek help from MOM immediately. Sir, no employer should ask their workers to sign on salary vouchers in advance or on blank salary vouchers. Anyone who has information on employers who do this should report this to MOM and action would be taken against the errant employers. 

Louis: I thank the Minister of State for the reply. Can I just check with the Minister of State whether MOM does track the number of employers that open a bank account for their work permit holders when they apply for their work permits? And two, does MOM know what proportion of work permit holders currently have bank accounts here in Singapore? 

Mr Sam Tan Chin Siong: Sir, as mentioned in my reply, right now, more than two-thirds of the work permit holders are paid using the e-payment. From our statistics, as regards to the provisions of the online e-payment during the application process for the work permit, close to two-thirds of the employers have actually chosen to open an e-payment accounts for their employees. 

Louis: Just one last clarification, Sir. If I could ask if MOM is willing to incentivise the process, so to try to incentivise the employers when they apply for the work permit to apply also for the bank accounts for their work permit holders. In that way, we can reach 100% of the work permit holders having bank accounts here in Singapore. 

Mr Sam Tan Chin Siong: Sir, I thank the Member for the suggestion. We will continue to consult the employers, the employment agencies and also the work permit holders to explore the possibility of making a comprehensive e-payment system for the payment of salaries.

But, as mentioned in my reply, not all the permit holders actually prefer to receive their salary electronically for a range of reasons. And also, not all the employers are able to do this because of administrative fees and other constraints. So, I think we should provide a framework where those who need e-payment of their salary will be able to do so, and at the same time, to also allow for some flexibilities for those who are genuinely not able to adopt this payment method, so that there will be a flexibility and also convenience between the employers and the employees.

Nonetheless, I take the Member's point. When we continue to do our policy review, we will find ways and means to further encourage our employers to adopt this e-payment method.

Source: Hansard (Parliament of Singapore)

Louis asked the Minister for Manpower in each of the past three years (a) how many employers have informed the Ministry in writing of modifications to the salary terms for a Work Permit holder to less favourable terms than declared and stated in their in-principle approval letter; (b) how many employers have been fined for not having done so; (c) how many notices of salary reduction have been issued to workers; and (d) on what grounds does the Ministry determine whether a salary reduction can be allowed.

Mrs Josephine Teo (MOM): When applying for Work Permits (WPs), employers are required to declare key salary terms, including the basic and fixed monthly salary, offered to prospective Work Permit Holders (WPHs). Since 2011, these terms have been reflected in the In-Principle Approval (IPA) letter, which is available in the WPHs’ native languages, and must be sent by the employer to the worker in his home country prior to the worker’s departure to Singapore. This ensures that the worker is fully aware and accepts the terms of conditions before leaving his home country.

In some cases, employers may discover that the WPH’s performance falls below what is expected, and thus cannot justify paying the agreed salary. Instead of terminating the WPH’s contract, MOM allows employers to revise the salary downwards, provided they have obtained the worker’s written agreement and have notified MOM of the revision. In the past three years, MOM was notified of salary reductions affecting less than 2 percent of non-domestic WPHs per year.

We have taken action against employers who reduced salaries without informing MOM or obtaining the WPH’s written consent. In the first half of 2018, a total of $105,000 in Administrative Financial Penalties were imposed on 17 errant employers.

Notwithstanding these safeguards, we have been monitoring salary disputes involving IPA salary reduction. The proportion of WPH salary claims which involve IPA salary reductions was stable at about 7% over the last 3 years, but increased to about 11% in the second half of last year.

Since February 2018, when mediating salary disputes, the Tripartite Alliance for Dispute Management (TADM) has insisted that employers provide documented evidence that the worker has consented to any salary reduction. TADM no longer allows for arguments from employers that the worker had provided tacit or verbal consent. In addition, MOM is considering the possibility of disallowing downward salary revisions altogether. While this will provide workers with more certainty of their wage for the entire duration of their stay in Singapore, it could also lead to possible early termination of employment even when the worker is willing to accept a lower wage. We will thus consult with relevant stakeholders to determine the best step forward.

Source: Hansard (Parliament of Singapore)

Louis asked the Minister for Manpower (a) in the past three years, of the notifications received to reduce the salary of a work permit holder stated in their in-principle approval letter, what proportions are within (i) one month (ii) one year of the work permit issue date; and (b) whether the Ministry will consider a limit on the amount a company is allowed to reduce the salary of the work permit holder.

Mr Zaqy Mohamad (for the Minister for Manpower): In the past three years, the Ministry of Manpower (MOM) was notified of salary reductions affecting less than 2% of non-domestic Work Permit Holders per year. From that number, less than one in 10 were within one month, and about four in 10 were within one year, after the Work Permit was issued.

As explained in a reply to a Parliamentary Question raised by the Member on this topic last month, MOM is studying the issue and we will consult the relevant stakeholders to determine the best step forward for foreign workers.

Louis: I thank the Minister of State for the reply. Could I just check further whether 2% is about 14,000 workers every year? It is quite a huge number. So, I want to check whether the MOM obtains this copy of the written consent to show that the worker accepts the salary reduction, or do we only verify that this written consent exists when a dispute occurs, during the dispute resolution stage.

Second, could I also ask, with the upcoming consultation, whether the MOM also be consulting with the NGOs that are working on this issue as well?

Mr Zaqy Mohamad: I thank the Member. I will take the second question first. Certainly, we are open to NGOs being consulted, or taking their feedback.

On the first question, certainly, I think that all the foreign workers have direct access to MOM if they want to make a complaint. At this moment, we do not take every written change at the point of application. But having said that, when there is a dispute, we will require the documentation to be provided. And the law protects the worker, especially when there is no documentation provided in terms of written agreement of the change in salary.

Louis: Thank you, Sir. Just one more question. I understand that the reply is that five in 10 of these salary reductions occurred within one year from the work permit issue date. But could I also check whether we have data on how many of the salary reductions occurred before the work permit issue date – which means that the foreign workers were promised a salary, but when they arrived in Singapore, the salary was immediately reduced. Does this conduct constitute providing false information to MOM during the work permit application stage?

Mr Zaqy Mohamad: Thank you. In short, any reduction in salary before the work permit issuance will constitute an offence. Technically, there is no need for them to submit any documentation because reduction in salary before work permit issuance is not allowed.

Source: Hansard (Parliament of Singapore)

Louis asked the Minister for Manpower (a) in the last three years, how many work permit holders are hired under the Direct R1 Pathway or Market-Based Skills Recognition Framework; (b) how does the Ministry verify that workers hired under the two schemes are paid at least the minimum salary of $1,600; (c) how many employers have been charged for false salary declarations relating to these schemes; and (d) whether the Ministry will consider requiring work permit holders on these schemes to be paid electronically to verify that they are paid the minimum salary as is done for S-Pass holders.

Mrs Josephine Teo (MOM): As at the end of 2017, there were 91,700 Work Permit Holders granted R1 (Skilled) status on account of their skills or years of experience, and meeting a minimum salary criterion.

As part of the application for or renewal of Work Permits, employers are required to declare that the indicated salary is true, and they are warned that failure to pay the declared salary or providing false information is an offence. MOM conducts random inspections to detect non-compliance. In addition, when foreign workers lodge complaints of underpayment of salary or kickbacks, MOM also investigates the employer for making a false declaration in their application.

In 2017, 61 employers were investigated for falsely declaring the salary in a Work Permit application involving the R1 qualifying routes raised by the Member. Of these, 18 employers were either prosecuted or issued with an Administrative Financial Penalty. Their work pass privileges were also suspended.

All employers are already required by law to pay their foreign workers through electronic means if the worker requests for it. The Migrant Workers’ Centre is stepping up education efforts to encourage workers to make such requests. They are also making arrangements to help foreign workers to open bank accounts. In addition, as earlier announced, MOM is consulting with stakeholders on the further step of making electronic payments of salaries mandatory for all Work Permit Holders.

Source: Hansard (Parliament of Singapore)

Louis asked the Minister for Manpower for each year in the past five years for non-Malaysian work permit holders with salary claims, what is the number of cases whereby (i) the employer does not pay the full sum ordered by the Labour Court or Employment Claims Tribunal (ii) the security bond is invoked to repay the worker (iii) the Migrant Workers' Assistance Fund (MWAF) is used to repay the worker and (iv) both the security bond and MWAF are invoked.

Mr Zaqy Mohamad (for the Minister for Manpower): In the last five years, the Labour Court and the Employment Claims Tribunals issued an average of 130 money orders per year for salary claims involving non-Malaysian Work Permit Holders. In most cases, affected workers received full payments from their employers or settlement payments through insurers. In about 10% of the cases, the Migrant Workers’ Centre stepped in to provide assistance to the workers via the Migrant Workers’ Assistance Fund (MWAF).

Employers are required to furnish a security bond (SB) for non-Malaysian Work Permit Holders whom they wish to employ. In the last five years, the Government forfeited an average of 150 SBs annually for workers with salary claims due to reasons such as non-payment of salary or failure to repatriate the workers. The MWAF is funded through donations from the public, which is matched by Government funding, rather than through forfeiture of SBs which can vary greatly from year to year.

All workers, local and foreign, should come forward when they face salary issues. The evidence clearly shows that early reporting greatly improves the chances of recovering the owed salaries fully from the employers.

Louis: I thank the Minister of State for the reply. Can I just check, for the 10% where the employers did not pay the unpaid wages, was the security bond used? Second, under what criteria is this security bond used and under what criteria is the Migrant Workers’ Assistance Fund (MWAF) used? And third, whether MOM has a preference on using either of these two?

Mr Zaqy Mohamad: Generally, we will talk to the companies to get the insurance to cover. If the insurance does not cover, the security bond gets forfeited, and the workers get assisted through the Migrant Workers’ Assistance Fund (MWAF). So, that gets deployed to supplement for the last 10%, for example, who do not get payments.

So, I think majority of those receiving orders actually get full payments but there will be some, if they approach the Migrant Workers Centre, we can provide some ex-gratia assistance, but on a case-by-case basis, to help them through.

Louis: Can I just confirm that when they file a case, they do get judgment in the Court and if the employer does not pay and the insurance is unable to pay, then the security bond will be used in all cases?

Mr Zaqy Mohamad: That is the order of preference, yes.

Source: Hansard (Parliament of Singapore)

Written Contracts for Workers Covered under Employment of Foreign Manpower Act

(Supplementary Question) Louis: On the point of salary reduction, I raised this earlier and MOM did say they are reviewing the ability of an employer to reduce the salary after the IPA was issued. Could I ask if there is an update on this review?

Mr Zaqy Mohamad (for the Minister for Manpower): Today, if you wish to reduce the salary, it has to be (a) with the agreement of the employee and (b) you have to notify the Ministry. The check is, you have to notify the Ministry before you can do it. That is your check and balance today.

Of course, if foreign workers have a concern, they can always report to the Ministry and we will take a look at it, for example, if there are other deductions that were not originally agreed by the employee. 

Was there a specific area that Member was after?

Louis: I understand that you can do that, but as the other Member had raised, there is a power imbalance here. So, if you are offered a salary in the IPA and then you have come to Singapore already, having paid all your deposits back in your home country, and the employer then says, "I am going to reduce your salary. Take it or you go back home", very likely, they will take it and very likely, they will not dare to report to MOM. I hope we can close that loop. 

The previous reply to me was 2% of workers faced this problem. But with the number of Work Permit-holders, 2% actually is quite a big number.

Mr Zaqy Mohamad: The 2% was not the number that faced the problem; but rather, the 2% was the number that came in without IPAs. We said 98% of foreign workers came in with IPAs. This is something that we can certainly work on. Today, the additional mechanism that we have is the SIP. What has been enhanced since then is that workers do have to come through SIP and they spend a day with not just the trainers, the facilitators, but there are also NGOs onsite like Migrant Workers Centre, for example, who conduct the SIPs themselves. One of the reasons we do that is to ensure that there is that check and balance from the NGO side, trainers, as well as teaching them their rights.

I do understand the Member's concerns. It is something that we will continuously improve on. The main difference in the last few months is that the SIPs have come in place and we have expanded them, especially for sectors that are most vulnerable. We have given focus to construction, manufacturing and process. That was where most of our disputes were in the past.

As you have seen, 98% of foreign workers come in with IPAs. It is an improvement from the past. But, yes, I do agree that we still have to work on that 2% who come in without the IPAs. Today, they cannot complete their SIPs if they do not come in with IPAs. That is something that we hope to expand and we will enforce against employers who do not comply.

Source: Hansard (Parliament of Singapore)

Plans to Study Effectiveness of Pilot Household Services Scheme

Louis asked the Minister for Manpower (a) whether the Ministry will be studying the effectiveness of the pilot Household Services Scheme that allows foreign workers to provide domestic services to households; (b) if so, what factors will be used to determine the effectiveness of the Scheme; and (c) how long does the Ministry intend to run the pilot before deciding to formalise the Scheme.

Mrs Josephine Teo (MOM): The Household Services Scheme (HSS) was piloted in 2017 to allow eligible companies to hire more foreign workers to provide part-time domestic services, such as home cleaning. Since then, the Ministry of Manpower (MOM) has been monitoring the demand for part-time domestic services and studying the effectiveness of the HSS in meeting households' needs for part-time domestic services. 

As demand for part-time domestic services picked up, MOM expanded the number of HSS companies from 15 in 2017 to 50 in 2019. We are still monitoring the Scheme to assess how it is meeting the needs of households and providers of domestic services, and the risks of HSS workers being diverted by companies to non-domestic work. The pilot has been extended to run until August 2020, and MOM will evaluate the results of the pilot thereafter.

Source: Hansard (Parliament of Singapore)

Louis asked the Minister for Manpower for each year in the past three years, among notifications sent by employers to the Ministry to reduce the salary of a work permit holder to below the amount stated on the in-principle approval (IPA) letter (a) what has been the median absolute amount of reduction; and (b) what has been the median percentage of reduction compared to the initial salary.

Mrs Josephine Teo: In the past three years, the Ministry of Manpower (MOM) was notified of salary reductions affecting less than two percent of non-domestic work permit holders (WPH) per year. The median amount of salary reduction reported was $170 in 2017, $160 in 2018 and $100 in 2019. The median percentage of reduction reported was 20% in 2017, 22% in 2018 and 17% in 2019, compared to the initial salary declared.

Under our laws, employers are not allowed to reduce the salary of their work WPHs below what was declared on the In-Principle Approval (IPA) letter unless they have obtained the workers' written agreement and notified the Ministry beforehand. WPHs who have their salary reduced without their agreement should approach MOM or the Tripartite Alliance for Dispute Management (TADM) to lodge a case. MOM will require him to make good any salary shortfall to the worker and impose a fine of up to $10,000. WPHs whose employment contracts are terminated by their employers for not agreeing with the salary reductions should also come forward to seek help from MOM. MOM will allow such WPHs to transfer to a new employer.

Source: Hansard (Parliament of Singapore)

Update on Possibility of Disallowing Downward Revisions from Salary Indicated in In-principle Approval Letter of Foreign Workers

Louis asked the Minister for Manpower whether she can provide an update on the Ministry's consideration on the possibility of disallowing downward revisions from the salary indicated in the In-Principle Approval letter (IPA) of a foreign worker.

Mrs Josephine Teo (MOM): The Ministry has reviewed the possibility of disallowing employers from making downward salary revision entirely, and consulted relevant stakeholders, including Singapore National Employers Federation (SNEF), Association of Small & Medium Enterprises (ASME) and the Migrant Workers' Centre (MWC). 

Through our consultations, tripartite partners recognise that there is a need to retain the flexibility to renegotiate employment terms, including making salary revisions to reflect the demonstrated performance of the worker. Disallowing downward revisions of salary entirely will leave the employer with no other option except to terminate the employment of a non-performing worker. Furthermore, tripartite partners have an understanding that in certain situations such as an economic downturn, businesses will reach an agreement with their workers on wage flexibility instead of retrenching the workers. Such approaches that cut costs to save jobs would no longer be possible if the Member's suggestion is adopted. 

Given the feedback from tripartite partners, the Ministry has decided to retain the flexibility for employers to revise the salaries of their foreign workers. We will continue to focus on protecting the interests of foreign workers by strongly enforcing against employers who reduce their workers' salaries without their agreement. When there are disputes involving salary reduction, the onus is on the employers to declare and substantiate their reasons for the salary reduction. The Ministry of Manpower's (MOM) actions against errant employers include requiring them to make good any salary shortfall to the workers and imposing a fine of up to $10,000 per worker. In 2019, we imposed a total of $488,000 in administrative financial penalties on 68 employers. MOM also allows such workers to be transferred to a new employer.

Source: Hansard (Parliament of Singapore)

Efforts to Ensure Work Pass Holders are Aware of COVID-19 Measures

(Supplementary Question) Louis: Just one clarification. I understand the rationale of making of sure that our workers come back only with approval. But it is the employer who submits the application to MOM for approval. In the case where the two workers came back to Singapore without approval, can I just ask what is the rationale of punishing the workers when it was not them who had to apply to get the approval to return?

Mr Zaqy Mohamad (for the Minister for Manpower): I thank the Member for his question. I think we have always made it very clear. It is both the responsibility of the worker and the employer. There are cases in which we have not punished the worker because the worker came to report to us and said his employer had forced him to come back. It is important and incumbent upon us. Again, the measures are in place because public health is at stake. So, in this case, I think we have to also take a really bird's eye view on how we want to deal with the issue, and in which everyone – both the employer and worker – has to cooperate.

Source: Hansard (Parliament of Singapore)

Number of Work Permit Holders Not Issued with Key Employment Terms from 2016 to 2019

Louis asked the Minister for Manpower (a) how many work permit holders have not been issued with Key Employment Terms in 2016, 2017, 2018 and 2019 respectively; and (b) whether the Ministry will start collecting such data if it does not currently do so.

Mrs Josephine Teo (MOM): Under the Employment Act, employers are required to issue Key Employment Terms (KETs) in writing to all employees within 14 days from the start of employment. Employers who fail to issue KETs or issue an incomplete set of KETs may be subject to an administrative penalty of a fine up to $400 for each breach. Uncooperative employers will also be directed to rectify the breaches and failure to abide by the direction will be a criminal offence.

A 2019 survey by MOM found that 98% of employees worked in private establishments that issued written KETs. This is consistent with our enforcement findings.

 The Ministry also ensures that the employment rights of workers are protected even if they are not given KETs by their employers. For work permit holders, employers will be required to pay minimally the salary that was declared in the In-Principle Approval letter and provide the statutory benefits as prescribed under the Employment Act. In resolving disputes, the Tripartite Alliance for Dispute Management and the Employment Claims Tribunals will draw adverse inference against employers who do not comply with our employment laws, such as failing to issue complete KETs in writing. MOM will continue to strengthen our enforcement and education of legislative requirements for KETs through mass media, WorkRight initiatives and targeted outreach to employers and workers. 

Source: Hansard (Parliament of Singapore)

Requirement for Employers to Declare Reasons for Salary Reduction from Amount Stated in In-principle Approval Letter

Louis asked the Minister for Manpower whether the Ministry will consider requiring employers to declare the reasons for the salary reduction from the amount stated in the In-Principle Approval letter of a foreign worker when they notify the Ministry and the foreign worker of the reduction.

Mrs Josephine Teo (MOM): When there is a dispute involving salary reduction from the amount stated in the In-Principle Approval letter, the onus is on the employer to show that he obtained the work permit holder's (WPH) written agreement and notified the Ministry of Manpower (MOM) beforehand. If the employer fails to prove either of the two requirements, the original declared salary holds and the employer will be required to make good any salary shortfall, regardless of reason for the salary reduction. In addition, MOM will also impose a fine of up to $10,000 per worker on the employer.

The requirement for employers to obtain their workers' written agreement ensures that the WPH can refuse to give his consent. WPHs whose contracts are terminated by their employer for refusing to provide consent should seek help from MOM. MOM allows such WPHs to find a new employer and we work with the Migrant Workers’ Centre to facilitate the process.

The suggestion by the Member to make employers declare the reason for the salary reduction when notifying MOM is redundant. Even if the employer did so, he would still need to obtain the written agreement of the WPH. In addition, it could have potentially unintended consequences, such as causing the worker to believe that the mere fact of notifying MOM regularises the salary reduction, even if the worker did not give his consent.

Source: Hansard (Parliament of Singapore)

Louis asked the Minister for Manpower (a) currently, what number and percentage of employers with foreign workers residing in dormitories (i) declared that they will pay salaries electronically (ii) paid salaries electronically and (iii) paid salaries in cash; (b) what specific steps, other than relying on worker complaints, does the Ministry take to monitor employers who are paying salaries in cash are correctly paying their foreign workers residing in dormitories; and (c) what are the exceptional circumstances under which employers are permitted to pay workers residing in dormitories in cash.

Mrs Josephine Teo (MOM): As is the case for all employees whether local or foreign, they must step forward to inform MOM if they have been paid an incorrect salary. It is in their own interest to do so in a timely manner.

Since April 2020, MOM has been requiring employers of foreign workers, especially those with workers staying in the dormitories, to make declarations on the status and mode of salary payment to their workers. This is an additional precaution that MOM has introduced proactively, to track the payment of salaries to foreign workers to intervene early in cases where salaries are owed. We also required employers to pay salaries electronically to ensure that workers can receive their salaries even if they are unable to leave the dormitories.

The vast majority of employers contacted declared to MOM that they would pay April 2020 salaries electronically. A very small number of employers declared that they were unable to do so, citing technical or administrative issues. Such employers were allowed to pay outstanding salaries in cash at dormitories where the risk of COVID-19 transmission was assessed to be low. 

MOM is following up on every case in which the employer declared that he owed salaries, or a dormitory worker reported that he was owed salaries. Should workers face any salary issues, they can raise them with the Forward Assurance & Support Team (FAST) officers on the ground, so that MOM can follow up with their employers.

Source: Hansard (Parliament of Singapore)

Louis asked the Minister for Manpower (a) whether she can provide an update on whether all migrant workers living in dormitories are now being paid their salaries electronically; (b) if not, what is the timeline for ensuring that all migrant workers living in dormitories are paid salaries electronically; and (c) whether the requirement for electronic payment will be extended to work permit holders not living in dormitories.

Mrs Josephine Teo (MOM): As of January 2021, more than 97% of employers with foreign workers living in dormitories were paying salaries electronically, up from 76% before the requirement was introduced in April last year.

Among the small minority of employers who have yet to switch to electronic payment of salaries, some have indicated administrative issues with the setting up of workers' bank accounts, while others have cited their workers' preference for receiving salaries in cash. MOM will take steps to ensure full-compliance, including educating employers and workers on why and how to implement electronic payment of salaries.

Paying salaries electronically has proven to be beneficial, especially during the COVID-19 pandemic. It ensures that foreign workers continue to receive salaries even when there are movement restrictions in place. It also helps prevent salary disputes, as there are digital records for each transaction.

Given the benefits of paying salaries electronically, MOM is in consultation with our tripartite partners on extending the requirements for electronic payment of salaries to more workers, including local workers and work permit holders who are not living in dormitories.

Source: Hansard (Parliament of Singapore)

Louis delivered his budget cut on Addressing Migrant Worker Agent Fees at Committee of Supply 2021 as follow:

Louis: Sir, migrant workers help to build our nation. I thank them for helping to make Singapore the shining red dot we are today. 

Many of them invest a significant amount of money to come to Singapore. They have to pay agent fees to even secure a job here. This means when they first step foot on Singapore soil, they are already thousands of dollars in debt.  

It is not enough to say that these fees were not paid in Singapore. These agent fees affect how effective our labour laws are. It results in a huge power imbalance.  

When migrant workers are saddled with huge debts, they are less likely to speak up against errant employers who flout Singapore’s labour laws. Agent fees paid overseas undermine our labour laws.  

Will MOM look into this problem and study the possibility of establishing direct recruitment channels through its licensed Overseas Testing Centres to cut out the middlemen? Will MOM also increase penalties for companies who are found to collect such kickbacks?

Dr Tan See Leng (The Second Minister for Manpower): Mr Louis Ng and Mr Leon Perera expressed concern, rightfully, about the recruitment process, including job advertisements, fees paid by migrant workers and if it was possible to establish direct recruitment channels. 

Our laws limit the recruitment fees charged to migrant workers by Employment Agencies (EAs) in Singapore at one month of their salary for each year of their contract, capped at two months. So, it is one month for each year capped at two months. EAs must also refund 50% of the recruitment fee to the worker if the employment is terminated within six months and MOM takes strong enforcement actions against EAs that do not comply with these requirements.

MOM also actively takes enforcement action against persons performing EA activities without an EA licence, or engaging in hiring activities without an agent licence. Such persons face a jail term of up to two years or a fine of up to $80,000, or both. Harsher penalties will be meted out for subsequent convictions, including fines of up to $160,000 or a jail term of up to four years, or both. So, receiving or offering payment as consideration for the employment of migrant workers is also prohibited under the EAA and the EFMA Act. Offenders found guilty under the EFMA Act can face a jail term of up to two years or a fine of up to $30,000, or both. 

In recent years, MOM has also adopted the use of data analytics to detect anomalies and fraud in the employment patterns of migrant workers more quickly and more accurately. This has helped us to proactively detect cases, in addition to complaints and tip-offs when we receive from NGOs, MWC ambassadors and migrant workers. We encourage all parties to provide us with the different data sources so that we can triangulate better and we encourage migrant workers who are made to pay monies to their employers or any other party as a guarantee of employment, and members of the public with information to come forward on all these illegal recruitment and workplace practices to inform us immediately. This is our appeal to you.

We have also ramped up education efforts. MOM has been educating foreign employees to report underpayment of salaries and employment kickbacks through various platforms and initiatives such as FWMOMCare app. During the mandatory Settling-In Programme, an orientation for first-time work permit holders, and roadshows, we will educate them. The regular presence of MOM’s FAST teams at the dormitories also allows for early detection. Hence, foreign workers are now aware that they have multiple avenues to seek help. We continue to encourage and we hope that you would help us to send the message out as well, to ask them to come forward early to report if they face any employment-related issues.

There was a decrease in illegal employment agent activities in 2019, with around 70 foreigners and 18 Singaporeans being taken to task, compared to an average of over 100 foreigners and 25 Singaporeans per year in the preceding three years.

We have not discounted this centralised job portal, as suggested by Members. While we see that as a possible opening and option, we recognise the fact that different employers tap on various channels to recruit employees, whether it is employment agencies, employee referrals or direct hiring from source countries. If we want to mandate a centralised recruitment platform for all employers, many of our businesses have given feedback that this will limit their hiring flexibility to meet their respective manpower needs. So, I think we have to be open to all different options.

In addition, such a platform can reduce but not necessarily completely eliminate fees paid by migrant workers to these "unlicensed" overseas agents or middlemen, to assist with the documentation that is required or to help them link them to this platform or "licensed", so to speak, employment agencies in the source countries. This is always a hard work-in-progress.

We will constantly and continually work with stakeholders including employers, migrant workers themselves, the NGOs, the employment agencies, to explore the various suggestions that have been brought up in the past, today and moving forward, to reduce the recruitment costs incurred by migrant workers seeking a job in Singapore. Like my appeal earlier on, the support of employers, the NGOs and acceptance by workers will be crucial.

Source: Hansard (Parliament of Singapore)

Louis asked the Minister for Manpower for each year in the past five years (a) how many cases involving employers receiving kickbacks from migrant workers did the Ministry investigate; and (b) of these investigations, how many led to (i) stern warnings (ii) charges and (iii) successful prosecutions against the employers.

Dr Tan See Leng (MOM): MOM takes stern action against employers or any other party who collect kickbacks from migrant workers as a condition or guarantee of employment. These kickbacks are offences under the Employment of Foreign Manpower Act (EFMA). 

Between 2016 and 2020, MOM looked into an average of 960 cases per year for kickback offences. An average of 102 employers were taken to task each year;  about 80% of them were issued with warnings or composition fines while the remaining 20% were charged in Court. For the cases that are prosecuted, about 90% were successfully convicted.

MOM will continue to take action against errant employers who collect kickbacks from migrant workers. In recent years, MOM has made use of data analytics to identify and detect unusual patterns in hiring practices more quickly and accurately. This has helped MOM proactively detect cases of employment kickbacks, in addition to complaints and tip-offs that we received. MOM has also stepped up education and engagement efforts to educate migrant workers that their employers cannot demand or collect kickbacks from them. Migrant workers who are asked to do so, should approach MOM for assistance. 

Source: Hansard (Parliament of Singapore)

Louis asked the Minister for Manpower (a) what are the top three ways by which the Ministry is alerted to potential kickback offences; (b) what are the respective percentages of cases that are reported via each of the top three ways by which the Ministry is alerted to kickback offences; and (c) how is the Ministry strengthening efforts to get workers to report kickback offences.

Dr Koh Poh Koon (for the Minister of Manpower): Sir, between 2016 and 2020, MOM looked into an average of 960 cases per year for kickback offences. Of these, about two-thirds are complaints lodged by migrant workers, one-third are referrals from members of the public, NGOs and other public agencies, while a small number are detected through MOM’s proactive inspections based on data analytics.

To encourage migrant workers to come forward to report kickbacks early without fear of reprisal from their employers, MOM will facilitate a change of employment for those who wish to continue to work here in Singapore. MOM will also refer affected migrant workers to selected employment agencies, which are committed not to charge these workers any fees for the job placement.

MOM also educates first-time migrant workers on kickback offences and ways to seek help through the mandatory Settling-In Programme. We have stepped up our engagement and education efforts by tapping on the network of migrant worker volunteers being developed by the Assurance, Care and Engagement (ACE) group and Migrant Workers' Centre (MWC) ambassadors to disseminate key employment messages. MOM will continue to work with community partners, leverage technology, such as the FWMOMCare app, and tap on social media channels to amplify these messages and reach out to more migrant workers.

Louis: Thank you, Sir. I thank the Senior Minister of State for the reply. I know of migrant workers who paid over $10,000 in kickbacks to come to Singapore to work. I think, no matter how good our labour laws are, this huge power imbalance and the fact that they are so heavily in debt would make our laws quite ineffective because not many would dare to speak up. 

Could I ask two clarifications? One, whether we can step up the protection for whistle-blowers. I think the Senior Minister of State mentioned about helping them find employment. But I think, in Taiwan, they go a step further by even providing financial incentives for those who reported the violations. Two, these kickbacks are so widespread, I am just wondering whether MOM is doing anything else to try and curb this illegal practice.

Dr Koh Poh Koon: Sir, I must first contextualise the extent of the problem because the Member believes that this is a very widespread problem. But in terms of kickback-related complaints, this forms only about 10% of all the complaints that MOM receives in a typical year. Instead of focusing on giving financial incentives for people who are, especially migrant workers who come forward and make that complaint, it is more likely important to help them understand what exactly a kickback is. The Settling-In Programme is very important in helping them be aware what constitutes a kickback and then, to explain to them that, actually, they would be protected from loss of jobs should they report the employer for collecting illegal kickbacks. I think that is something that we should work a lot to reassure our migrant workers so that they feel comfortable coming forward.

But the other side of the equation is to impose strict penalties and make sure that we take a strong stance against employers who resort to such illegal activities, so that the deterrence should be on the side of the employers, not so much as incentivising through financial means, to induce our foreign workers to come forward. I think what they look for is more protection and job security and that is something that we want to provide.

The financial disincentive for employers to do so is already enshrined in our Employment of Foreign Manpower Act, where if they are convicted for kickbacks, they will be liable to a maximum fine of $30,000 or imprisonment up to two years or both, per offence.

Louis: Thank you, Sir, could I just ask one more clarification? I think there are some proposals out there on whether we can do some accreditation of the recruiting agencies at where the kickbacks are paid. I think that might be a way forward to ensure that the companies here only recruit migrant workers from accredited recruiting agencies.

Dr Koh Poh Koon: Sir, the Member's suggestion is already implemented today. There is already on our website a list of accredited and registered employment agencies so that those who are not registered will be taken to task for illegal recruitment activities and would be punished by the full effects of the law.

Source: Hansard (Parliament of Singapore)

Louis asked the Minister for Manpower in each of the last five years, in respect of the investigated cases where employers are alleged to have received kickbacks from migrant workers, how many and what percentage involved are found to have received kickbacks (i) prior to or at the point the worker started employment (ii) in the course of employment and (iii) at the point of renewal of work passes.

Dr Tan See Leng (MOM): The point at which kickbacks were collected, be it at the start of the migrant worker’s employment or at the point of work pass renewal, does not impact the enforcement action taken against errant parties. As such, although such information could be recorded as part of investigation, MOM does not track data on the point at which kickbacks were collected. Our broad estimate is that the number of kickback cases investigated is about evenly split between those at the start of the worker’s employment and those at the point of renewal of work passes. 

The collection of kickbacks as a condition or guarantee of employment is an offence under the Employment of Foreign Manpower Act (EFMA). Migrant workers who have paid or been asked to pay kickbacks to anyone for employment should approach MOM for assistance. 

Source: Hansard (Parliament of Singapore)