Help for Employers Caught Out by Indonesia's New Zero Placement Fee Policy for Domestic Helpers
Ministry of ManpowerSpeakers
Summary
This question concerns support measures for employers impacted by Indonesia’s "zero placement fee policy," which shifts various recruitment costs to employers of new Indonesian domestic workers. Member of Parliament Melvin Yong Yik Chye inquired about alleviating the financial burden for employers who are unable to afford these increased placement fees. Minister Josephine Teo explained that the policy’s transition period was extended to 15 July 2021 and that agencies must provide clear fee breakdowns. She advised employers to consider workers from alternative countries or utilize part-time domestic help under the Household Services Scheme to manage expenses. Minister Josephine Teo further suggested that families with caregiving needs approach the Agency for Integrated Care or the Early Childhood Development Agency for assistance.
Transcript
34 Mr Melvin Yong Yik Chye asked the Minister for Manpower arising from Indonesia’s new "zero placement policy" (a) what measures can the Ministry put in place to support employers who need to hire new foreign domestic workers from Indonesia; and (b) whether the Ministry has any plans to help alleviate the financial burden for such employers who are unable to afford the placement fee.
Mrs Josephine Teo: The Indonesian authorities have informed employment agencies (EAs) in Singapore that it will be introducing a "zero placement fee policy". This policy requires employers to bear placement fees and other costs incurred by new Indonesian foreign domestic workers (FDWs) when seeking employment overseas, including the costs of air tickets, work visas, passport replacement, medical examinations, transportation and accommodation. While this policy was supposed to have taken effect on 15 January 2021, the Indonesian authorities have extended the transition period by six months, until 15 July 2021. EAs have indicated that the service fee charged to employers for Indonesian FDWs could increase as a result of this policy.
To avoid these higher fees, employers can consider FDWs other than those from Indonesia. Regardless of the country of origin, employers should ensure they have full information of the cost implications before making their hiring decisions. EAs are required by Singapore law to provide employers with a clear breakdown of the fees charged to them and their FDWs. Depending on employers’ preferences and cost considerations, EAs will advise them on the options that best meet their requirements. EAs will likely make adjustments to bring in FDWs from countries with growing demand by employers.
Alternatively, employers can consider hiring part-time help from domestic services providers under the Household Services Scheme. Those with caregiving needs for the elderly or young children may also approach agencies like the Agency for Integrated Care (AIC) or the Early Childhood Development Agency (ECDA) for assistance on accessing subsidised services.