Employers Who Lower Migrant Workers’ Salaries: More Needs to be Done

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17 August 2018

Early last month, the Ministry of Manpower (MOM) announced that it is considering a ban on the downward revision of In-Principle Approval (IPA) basic salaries for migrant workers. HOME welcomes this development.
On 6 August 2018, Minister of State for Manpower, Mohammad Zaqy, disclosed that salary reductions affected approximately 14,000 of non-domestic workers. This figure does not include cases where employers arbitrarily reduce salaries without first informing the ministry. It is still unclear how many of these reductions are consensual in the first place.

In many cases, the reduction of basic salaries is done unilaterally by employers upon a migrant worker’s arrival, even before workers’ skills can be evaluated. The MOM needs to guard against employer abuse of the Work Permit system, and investigate employers for furnishing false information if salaries are reduced in a time frame that strongly suggests it is not related to an employee’s performance at work.

In fact, in certain cases, jobs promised differ drastically from the jobs workers are actually tasked to perform when they arrive. This makes it easy for employers to blame the reduction of salaries on any mismatch in workers’ skills. In addition, many cases remain undetected as migrant workers may be unsure how their monthly salaries are calculated. Employers often pay employees in a lump sum at the end of the month but do not provide detailed time records and itemized pay slips that clearly state workers’ basic wage and other entitlements (such as overtime pay and rest day pay). This lack of clarity and transparency means that even if salary claims are filed, the problem of basic salaries being reduced from their declared basic salary rates may not be addressed.

Currently, employers are able to reduce workers’ salaries on MOM’s online portal without their knowledge or consent with just a few clicks. Employers or recruiters who deceive workers with promises of higher salaries should be penalised. Deceptive recruitment is a key indicator in forced labour and human trafficking and greater effort must be made to prohibit and punish such practices.

While MOM’s website states that employers need to get a worker’s written consent before decreasing their salaries, Mohammad Zaqy revealed that MOM did not verify if a worker’s written consent has been obtained unless a claim for salary arrears is filed by the worker.
Additionally, it needs to be recognized that written agreements can be solicited through pressure or coercion as low-wage migrant workers pay hefty recruitment fees and lack the bargaining power to refuse employers’ demands out of fear of losing their jobs and being repatriated. If an employer intends to lower a worker’s salary, the worker should also be given the option to transfer to another employer. Currently, the Ministry of Manpower allows workers with salary claims to switch employers even without their current employer’s consent. While workers who are given permission to do so encounter multiple obstacles in landing a job, this concession should also be extended to workers who are deceived about their pay.

Case Study 1: IPA-Declared Salary S$1,600, Reduced to S$429

Before Safiar arrived in Singapore he was told he would be performing the job of a rigger signalman with a basic monthly salary of S$1,600. This amount was declared to the Ministry of Manpower and reflected in his In-Principle Approval (IPA) letter. He was asked to pay an illegal recruiter, another worker in Singapore, a total of S$5000 in recruitment fees: S$2,000 of this amount was paid to the illegal recruiter’s brother in Bangladesh while S$3,000 was paid directly to the illegal recruiter in Singapore. The illegal agent later confessed that Safiar’s employer had taken S$2,000 as kickbacks. In order to afford these fees, Safiar had to lease his family land and borrow from banks in Bangladesh based on a repayment interest rate of 20% monthly but had expected to recover this amount within four months.

However, after Safiar arrived he was provided a notice from MOM that his employer had reduced his basic salary from S$1600 per month to S$452 per month. Safiar was informed by MOM that he could make a salary claim later should he not agree to the reduction. He subsequently found out that his company did not have a job for a rigger signalman and he was asked to perform rebar concrete casting work instead. His employer then further reduced his salary to S$429 a month (or S$18 a day). When he protested the reduction in salary, his employer simply asked him to continue working but began creating difficulties for him at work. During the second month, his employer insisted that he accept the reduction in his salary and withheld his salary unless he was willing to sign a contract consenting to the reduction.

He eventually made an unpaid salary claim at the Ministry of Manpower when his employer refused to pay him for the second month. Initially, the MOM mediation did not consider his original declared basic salary of S$1,600. HOME assisted Safiar to make an appeal about the non-consensual downward revision in salaries. Safiar finally managed to get back around S$3,800 though he was owed around $4,500.

Case Study 2: IPA-Declared Salary S$1,650, Reduced to S$524

Bashir (not his real name) was promised a job as a lift operator with a basic monthly salary of S$1,650 ($69 per day). The illegal agent, also a construction worker in Singapore, asked him for S$3,500 in recruitment fees. Bashir had expected to recover his recruitment fees after two months of working. However, when he arrived in Singapore, his employer informed him that he would be paid a rate of only S$22/day, without additional payment for overtime work or work on rest days and public holidays, thereby adjusting his basic monthly salary to only S$524 per month. He was asked by his employer to sign pay slips in advance, with S$1,600 pre-written on them even though he had not received those salaries. He also found out that the company did not require any lift operators but would instead deploy him to perform concrete rebar casting jobs in another company. This is illegal. For this, he would only be paid between S$700–S$800 a month. After 10 months, he decided to lodge a salary complaint.

The underpayment of his basic and overtime wages and wages for work performed on rest days and public holidays amounted to S$21,006. As his claim amount exceeded the statutory limit allowed at the Employment Claims Tribunal (ECT), he was asked to reduce his salary claim to S$20,000. Bashir also had to produce evidence to show he did not receive the S$1600 stated on his payslips, and that he was asked to sign on the payslips at the beginning of his employment, before he had received any money. The employer brought his family members to the court and they pleaded with Bashir and his colleagues to settle for less, claiming financial difficulty. Eventually, Bashir agreed to settle for S$5,000, a fraction of what he was owed.



Stephanie Chok