Singapore: Salary Violations Show Foreign Labor ‘Tension’

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By Lien Hoang

Aug. 1—Singapore has fined employers for underpaying immigrant workers in two separate cases that aimed to control foreign labor, which has emerged as a lightning rod for voter dissatisfaction in recent elections.

The penalties amount to S$72,000 (US$54,000) for fashion house Yen's Studio's executive director Yen Ser Ming, and S$20,000 (US$15,000) for Tan Boon Sing, owner of KT Engineering & Construction, the Ministry of Manpower announced this month. Both companies also lost the right to hire foreign workers.

“Falsifying salary information to mislead the ministry” is a “serious offence,” Kandhavel Periyasamy, director of the employment inspectorate in the ministry's Foreign Manpower Management Division, said in a press release July 21. “We will take stern action against persons or companies, including barring them from applying for new work passes and renewing their existing work passes.”

Both Yen and Tan pled guilty to paying foreigners less than the minimum monthly salary needed to obtain work permits. They officially reported the salaries at S$2,200 (US$1,600) as required, but then forced workers to return a portion of the money in secret, the ministry said.

‘Token' Law?

The government, largely controlled by the People's Action Party, has faced electoral pressure to reduce labor from overseas in the last half decade. Voters lament that Singapore, an island nation of 3.4 million citizens and 2.2 million noncitizens, relies too much on foreign workers and lacks proper infrastructure to bear the influx.

“This has been a trend since the last general election,” Yap Wai Ming, a partner at Singapore-based law firm Morgan Lewis Stamford, said of the limits on immigration.

Yap told Bloomberg BNA that the manpower ministry “wants to increase productivity and this is in part a continuing effort of encouraging employers to hire locals and the elderly back to the work force.”

The twin convictions in July reflect a “tension” between Singapore's demand for labor and its need to manage incomers, said Chen Siyuan, assistant professor of law at Singapore Management University. He said the city-state's minimum salary rules restrict how much businesses can tap cheap labor.

“Active prosecution shows that the government is serious in regulating the number of foreign workers,” Chen told Bloomberg BNA. “If employers are able to get around the law so easily, then the law becomes just a token one.”

The manpower ministry said that since 2014 it has punished 58 employers that falsely declared salaries. Maximum penalties are S$20,000 per charge and/or two years in jail.

To contact the reporter on this story: Lien Hoang in Ho Chi Minh City at correspondents@bna.com

To contact the editor responsible for this story: Rick Vollmar at rvollmar@bna.com

For More Information

The Ministry of Manpower's press release about the Yen's Studio case is available here, the ministry's press release about the KT Engineering & Construction case here. Singapore's official population data can be found here.

For more information on Singaporean HR law and regulation, see the Singapore primer.

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