Employers foresee problems with new MOM rule disallowing them from keeping helpers’ money

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The Ministry of Manpower released a new condition of the Work Permit which prevents employers from sake-keeping money on behalf of their domestic workers. This new ruling, which is set to take effect on January 1, 2019, was put in place by MOM for the protection of workers and employers from money disputes, but it brought along with it a new set of concerns expressed by employers – lack of financial literacy and savings for workers.

The penalty for employers found violating the rule of safekeeping a helper’s cash, including salary, can include a fine of up to $10,000 and 12 months in jail.

MOM also reported that it received around 600 complaints per year on issues with helpers’ salaries in the past three years.

The Straits Times took a poll of 25 employers of maids and found that 14 employers did not safe-keep money for their domestic helpers, and most of those who did said that the arrangement had been initiated by helper asking for assistance or was agreed upon mutually.

Through the survey, different employers shed light on the old arrangement of safe-keeping money for their helpers.

Employer Mrs. K. Ong shared that she has been safe-keeping her helper’s salary for the past five years, ever since the helper started working for her.

Mrs. Ong does not have a problem with the new condition, “but the current arrangement is at my helper’s request,” said Mrs. Ong, who said that her helper did not feel comfortable about keeping a lot of money in her own room.

Mrs. Ong reported that she advised her maid to deposit her salary in a bank account, where it would be safe, but her helper said she felt better with her money being kept safe at home.

“My maid trusts me and I trust her, so that is what makes the arrangement work,” Mrs. Ong said.

Another employer, general practitioner Dr. C. Tan, said she safe-keeps her helper’s salary as she does not want the woman to lose it or spend unwisely.

Dr. C. Tan suggested that MOM make both employer and employee sign an agreement “if the maid requests [for the employer] to safe-keep [her salary]. Like for, example, if the employer is willing to help to account for the monies.”

Some helpers actually prefer the arrangement of their employers safe-keeping their money. Indonesian Foreign Domestic Worker (FDW) Ismonah Sunareri, said that she prefers that arrangement as “It’s more convenient and I won’t have the tendency to anyhow spend the money.”

While some employers had concerns that their helpers would not be able to manage their salaries and might turn to moneylenders or loan sharks if they spent all their funds, the employers also acknowledged that the new rule has its benefits.

“It is less of a hassle for me if I do not safe-keep her salary as I won’t have to keep taking the money out when she asks for it,” said Mrs. Ong.

This is a good opportunity for helpers to learn financial literacy, apply for bank accounts and deposit their salaries there. Island Maids director Gabriel Ee said his agency advises employers to get bank accounts for their helpers and then pay their salaries electronically.

“Safekeeping salaries used to be prevalent in the past, but younger employers are usually receptive to opening a bank account for their maids,” he added.

Mr. Ee said the new ruling will help the employer-employee relationship to stay away from dreaded monetary disputes. “Now it’s clear what employers can or can’t do when it comes to maids’ salaries,” said Mr. Ee.

Humanitarian Organisation for Migration Economics (HOME) manager of advocacy and communication, Ms. Stephanie Chok, said that it is time for helpers to be in-charge of their own finances. Ms. Chok said that MOM should have safeguards in place for protecting helpers who report that their employers are continuing to keep their salaries from them.

“They should be assured they will not be punished or lose their job if they raise the issue.”

Ms. Chok also addressed employer concerns that maids lacked the financial literacy to spend or save their money wisely. In answer to this, she encouraged employers to help support their workers by teaching them financial literacy and enrolling them in personal finance courses.

Netizens feel that the new ruling, which is supposed to protect both employees and employers, only protects the helpers, leaving employers unprotected:

This netizen echoes employers’ concerns of helpers’ lack of financial literacy and ability to save:

And it was also commented that helpers need to take charge of their own finances, just like everyone else: