HOME Calls Upon Ban on Errant Employers Defaulting on Wages of Foreign Workers

February 6, 201712:48 pm533 views

A non-governmental organisation, Humanitarian Organisation for Migration Economics (Home) is fighting for the rights and against exploitation of foreign labour. It has called upon employers to be banned from starting new companies, especially when they have defaulted on timely payment of wages to foreign workers.

In a research paper published this month, HOME has urged MOM proactively prosecute errant employers and give the new Employment Claims Tribunals more power. Based on an interview with 2, 009 work permit holders from China, Bangladesh, India and Malaysia  who sought help from the organisation in 2015, it found that a lot of employees from these countries are not been paid wages on time and underpayment was the most common concern.

The paper titled, ‘Wage Theft & Exploitation Among Singapore’s Migrant Workers’, sheds light on the multiple ways migrant workers are denied their legally or contractually promised wages, and are subjected to a range of exploitative wage practices.

Common forms of wage theft include non-payment and underpayment of wages, especially overtime wages. Other exploitative wage practices include wage discrimination, whereby different nationalities of workers are paid different rates of pay for equivalent work, and wage manipulation, in which payment systems are deliberately obtuse and confusing, making salary claims needlessly onerous.

Deceptive recruitment practices, including contract substitution, add to migrant workers’ wage woes and greatly complicate attempts to seek remedial justice. Here are some of the wage trends commonly observed:

Wage theft

Unpaid or late payment of wages: 51.4 percent of workers who approached HOME sought assistance for unpaid or short payment of wages. A common occurrence is the withholding of salaries. Employers may do this so that if a worker resigns, his/her owed wages will either be forfeited or deductions will be made to significantly reduce the amount.

Underpayment of wages: 37 percent of workers of all nationalities told that they were not paid the stipulated overtime rate, or were only paid overtime wages from the 10th hour onwards instead of the 8th hour on a normal weekday.

30.5 percent of workers were not paid double the basic rate even though they worked full days on their rest days at the request of their employers. The majority of workers seen at HOME, an estimated nine out of 10 are not given paid annual leave.

Unauthorised wage deductions: 26 percent of workers who approached HOME shared that their employers make unauthorized deductions from their wages. Typical deductions are for the foreign worker levy, work permit renewals, recruitment agent fees, insurance premiums, safety effects, breach of contract and “savings”.

“Kickbacks”, which refers to money demanded by employers as a condition for hiring migrant workers or for renewing their work permits, is illegal under the Employment of Foreign Manpower Act. However, it remains a known practice and employers may demand sums of $1,000 to $2,000 to renew a migrant worker’s work permit when it is about to expire.

Wage manipulation

There is a perturbing lack of transparency about payment methods. Up to 90 percent of construction workers from China who sought assistance in 2015–2016 were unsure whether they were paid properly for overtime work and work done on rest days and public holidays. HOME estimates that up to 90 percent of employers do not adhere to overtime payment methods stipulated by the Employment Act for construction work remunerated by the piece rate-method.

When challenged for an explanation on how wages are calculated, employers often resort to convoluted arguments or refer to contracts that stipulate multiple pay rates involving obtuse formulas and subjective criteria such as a worker’s attitude and the quality of work done.

Financial penalties are a common means of threatening workers into compliance, and is often written into employment contracts. One construction company’s employment contract states that, other than on rest days and public holidays, if an employee is “absent from work without acceptable reason, deduction of $50 per day will be made for absence from work [sic]”.

Another construction company’s contract stipulates that migrant workers are to hand over their passports and work permits to the employer upon arrival in Singapore. Those who refuse to do so may be terminated and fined S$1,000. In one extreme case, a construction company first refused to acknowledge a migrant worker’s resignation, then later sent him a Letter of Demand to recover course fees, “early termination charges” as well as cumulative fines for being “absent from work.”

Deceptive recruitment and contract substitution

Up to 20 percent workers reported of being deceived either by their employers or agents about the salaries they would receive in Singapore. These were often in the form of verbal promises of higher salaries and better working conditions than what they had experienced when they finally arrived in Singapore.

Some were asked to sign contracts which were not in their native language under duress, for salaries which were lower than what was declared in their IPAs. 11 percent of migrant workers also reported being deceived into irregular working arrangements in Singapore. They are illegally deployed to work in different companies within the same industries or have to work in companies in other industries.

This leaves the men vulnerable to being further cheated, as they will be unable to seek remedial justice if they are not paid for their work; they are also susceptible to being arrested and charged for performing “illegal work”.

Wage depression

Construction workers from Bangladesh were earning S$17–S$19 a day in the early 1990s. More than 25 years later, in 2017, the construction workers are still receiving similar starting salaries of S$16–S$19 a day. In one case, HOME is assisting with, Bangladeshi construction worker, Arif who has been receiving a monthly salary of S$300 for the past five years.

Wage discrimination

Chinese construction workers’ hourly wages are double that of Bangladeshi construction workers, though they are engaged in similar types of work in the same industry. Bangladesh conservancy workers, meanwhile, are paid half of what resident cleaners are paid, despite working longer hours and being assigned the more strenuous cleaning tasks.

These forms of wage discrimination, in which workers of different nationalities and ethnic groups are paid less for equivalent (sometimes more) work appears to be entrenched across industries. The wage problems faced by low-wage migrant workers in Singapore are wide-ranging and persistent.

While the problems have been sorted into categories for this paper, in reality many workers who come to HOME for assistance experience multiple forms of wage theft and wage exploitation at any one time: unpaid wages for some months, short payment at other times, and unauthorized deductions throughout their employment.

They may also be asked for kickbacks and are often not provided itemised pay slips, a copy of their employment contract (if there is one) or a full set of time cards. When migrant workers finally decide to file a formal claim, they may have to contend with the surfacing of different forms of documentation that may be incomplete, fraudulent, or contradict each other.

Mediation processes, meanwhile, suffer from a lack of consistency and transparency, in which a swift settlement is prioritized. Claims that proceed to Labour Court, meanwhile, present another set of problems, including the inability for workers to enforce judgment orders, even if they win their case.


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