The Ministry of Manpower (MOM) has issued a new Work Permit condition stating that employers are no longer allowed to hold or keep money (salaries, bonuses or any personal money) belonging to their hired domestic workers. This is slated to take effect in January 2019.
MOM reported that there were an average of 600 cases of salary disputes per year. Most of the disputes were over the safekeeping of salaries and money of workers by employers.
MOM said the practice of employers safekeeping their helpers’ money poses many inconveniences and risks to both parties.
Earlier this year, the Centre for Domestic Employees brought forward the condition that employers should not be allowed to keep any money belonging to their workers.
“We are aware that employers safe-keep their foreign domestic workers’ money for various reasons, including doing so at the request of their FDWs,” said Senior Parliamentary Secretary for Manpower Low Yen Ling.
“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.”
Non-compliance with any Work Permit condition is considered an offense under the Employment of Foreign Manpower Act (EFMA). Authorities will act on any and all complaints filed, and employers who disregard the condition will face a fine of up to S$10,000 and/or jail time of up to 12 months.
This practice of employers safe-keeping money for their FDws is complicated. The workers, who have no direct access to their money, would have to ask employers for cash whenever they need their money, reported the MOM.
Employers would then need to have the “inconvenience of tracking the correct amount of money” and keep accounting for all transactions.
Improper documentation and not keeping books could result in issues. According to the MOM, FDWs “who may not be comfortable to ask for the return of [their] money” might feel the need to file cases against their employers.
The MOM provided details on previous cases which arose from sake-keeping arrangements gone wrong. In most cases, the problem was over the accuracy of the amounts kept because of no documentation.
In a unique case, a FDW could not get access to her money as her employer, the only one who knew where the money was kept, suffered seizures and fell into a coma.
In another case, a worker had accumulated S$11,000 under a safekeeping arrangement with her employer. When she was ready to ‘withdraw’ her money, the employer could not return her money in full because of financial difficulties. Her money had to come back to her in installments.
The MOM reminded employers that they are legally required to pay their workers “in full and on time” and, for documentation and to avoid disputes, make the payments electronically through bank transfers.
If their FDWs do not have bank accounts, MOM recommended that employers assist their domestic workers apply for a bank account, such as the POSB Payroll Account, during the Work Permit issuance process.
The Centre for Domestic Employees and Humanitarian Organisation for Migration Economics (HOME), have previously said that employers should not be allowed to keep any money belonging to their employees.
Non-governmental organization HOME urged the Government to make issue the condition making it legal for workers to be paid electronically. It also recommended setting up a statutory fund for workers who are not paid by their employers because of serious financial difficulty such as bankruptcy.