Wage theft and exploitation among migrant workers in Singapore
31st January 2017

Written by: Stephanie Chok

HOME’s position paper, ‘Wage Theft & Exploitation Among Singapore’s Migrant Workers’, aims to shed light on the multiple ways migrant workers are denied their legally or contractually promised wages, and are subject to a range of exploitative wage practices. Common forms of wage theft include the 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.

In the period 2015–2016, HOME assisted a total of 2009 migrant workers—from Bangladesh, China, India and Malaysia—at its helpdesk for non-domestic workers. Here is a brief summary of the key wage-related trends:

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 occurence 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 us 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% 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 about whether they were paid properly for overtime work and work done on rest days and public holidays. From HOME’s experience, we estimate 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.

Deceptive recruitment and contract substitution

Up to 20 percent of workers reported being deceived either by 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 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% 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

Bangaldeshi construction workers were earning S$17–S$19 a day in the early 1990s. More than 25 years later, in 2017, Bangladeshi 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, 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. Bangladeshi 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 itemized 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.

To read the full paper, including our recommendations, go here

Image credit and source: Wage theft graphic by Russel Hausfeld, from http://www.newsrecord.org/news/council-passes-wage-theft-bill/article_534c0ece-cddd-11e5-9630-bb1666adc72b.html