Employers no longer allowed to safe-keep money belonging to their helpers under new MOM rules

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From 1 January 2019, the Ministry of Manpower (MOM) will introduce a new Work Permit condition to protect both employers and foreign domestic workers (FDWs) from money-related disputes. Employers would no longer be allowed to safe-keep any money belonging to their FDWs, including paid salaries or any other money.

Earlier this year, the Centre for Domestic Employees had suggested that employers should not be allowed to keep any money belonging to their FDWs. Ms Low Yen Ling, Senior Parliamentary Secretary for Manpower said, “We are aware that employers safe-keep their FDWs’ money for various reasons including doing so at the request of their FDWs.  However, such arrangements may inadvertently lead to disputes. By not allowing employers to safe-keep salaries, MOM seeks to protect the interests of both the employers and FDWs.”

Inconveniences and risks associated with safekeeping arrangement 

The practice of employers safekeeping the money of FDWs poses inconveniences and risks to both parties. FDWs who have no direct access to their money will have to approach their employers whenever they need their money. On the other hand, employers will have to deal with the inconvenience of tracking the correct amount of money to be returned to their FDWs. Other risks include employers not having proper documentation and facing claims lodged by FDWs who may not be comfortable to ask for the return of her money.

Electronic salary payment is encouraged

The law requires employers to pay their FDWs’ salaries in full and on time.  For ease of transaction and maintenance of proper salary records, employers are encouraged to pay the salaries of their FDWs electronically. They can help their new FDWs apply for a bank account, such as the POSB Payroll Account, during the Work Permit issuance process.

The above is a press release by the Ministry of Manpower.