Employers' Declarations on Modifications to Salary Terms for Work Permit Holders

6 Mr Louis Ng Kok Kwang asked the Minister for Manpower in each year since 2019 (a) how many employers have informed the Ministry in writing of modifications to the salary terms for a work permit holder to less favourable terms than declared and stated in their in-principle approval letter; (b) how many employers have been fined for not having done so; (c) how many notices of salary reduction have been issued to workers; and (d) on what grounds does the Ministry determine whether a salary reduction can be allowed.

The Senior Minister of State for Manpower (Dr Koh Poh Koon) (the Minister for Manpower): When applying for Work Permits (WPs), employers are required to declare key salary terms, including the basic and fixed monthly salary, offered to prospective Work Permit Holders (WPHs). Employers are allowed to revise the salary downwards, provided they have obtained the worker’s written agreement and have notified the Ministry of Manpower (MOM). This is to provide flexibility for instances where the worker’s performance fell below expectation and cannot justify the salary paid. Workers can check their latest salary as declared by their employers to MOM through the MyMOM portal on MOM’s website. MOM is also working on sending a push notification to workers via the SGWorkPass app to inform workers of any salary changes in a timely manner.

From 2019 to 2022, MOM was notified of salary reductions affecting an average of about 3% of non-domestic WPHs each year.

Where there is a dispute over salary reduction from the amount stated in the in-principle approval letter, the employer is required to show documented evidence of the worker’s consent and that he had notified MOM beforehand. Otherwise, the original declared salary holds and the employer will be required to make good any salary shortfall, regardless of the reason for the salary reduction.

If the employer reduces the worker’s salary without their consent or does so before informing the Controller, they are liable to a fine of up to $10,000 per worker. From 2019 to 2022, administrative financial penalties were imposed on an average of 27 employers per year.

Mr Speaker: Mr Louis Ng.

Mr Louis Ng Kok Kwang (Nee Soon): Thank you, Sir. I thank the Senior Minister of State for the reply. I think he mentioned 3% of the workers. Could I just get an absolute number?

Second, could I just ask whether MOM can review my earlier suggestion? I do understand that there is a need for flexibility in terms of salary reduction, but could we at least cap it? Because I know there are cases where there can be a reduction of more than 50% of their salary.

Could I also just ask how does MOM proactively look for cases where there had been salary reduction but were not reported to MOM?

Dr Koh Poh Koon: Sir, on his first question, I do not have the exact number per se but just to clarify that the 3% cited for notification of salary reductions does not necessarily mean that they are all illegal or in violation, because there could well be genuine reasons why these reductions take place. For example, if the worker is underperforming and the employer rationalises the salary to be paid to a non-performing worker in lieu of retrenchment or firing the worker, which would have been the only other recourse that is left.

So, I just want to make clear the point that the 3% notification does not mean that there has been absolute violations.

As I said in the later part of my reply, in the same time frame of 2019 to 2022, the administrative financial penalties were meted out to 27 employers per year. So, that gives the Member a sense of the gravity of the problem, which in the grand scheme of things, is a very small number of employers that has been taken to task.

I did not catch the second clarification. Perhaps the Member can specify that again.

Mr Louis Ng Kok Kwang: Just to ask whether we can put a cap in terms of the salary reduction. Because I know there are cases where the salary could be reduced by more than 50% which is quite significant for some of the migrant workers.

Dr Koh Poh Koon: Sir, I think the consultation with tripartite partners is that it is very hard to have an actual cap. Depending on the circumstances, there may well be true, justifiable reasons to vary the amount of salary reduction to be paid or to be deducted from the worker. For example, in a severe economic downturn, employers may have to cut cost significantly to save jobs. And in the instance, it may be preferable even for the migrant worker to continue to be in employment rather than to lose his job and be repatriated.

So, I think this is something which has to be negotiated between the employer and the employee and have written consent, and to be notified to MOM. And if there are disputes regarding that, this is where further reconciliation and investigation by MOM can take place.