New guidelines on loans for domestic workers from Philippines

Singaporean employers planning to take on domestic helpers from the Philippines can lend up to $1,100 to the workers to cover the expenses for their employment, the Association of Employment Agencies (Singapore) [AEA(S)], president K. Jayaprema announced.

The AEA(S) president said, the new payment structure, which will take effect immediately, is meant to provide more clarity for workers and employers. The workers should use only up to half of their monthly salaries to repay the loan, she added.

“In the past, no one talked about the actual amount needed. We feel this is a sensible figure and should make the costs lighter and clearer, for employers as well,” she said.

The associations found that the costs of preparing to work here, including the charges for pre-employment training, medical examinations and getting a passport, amount up to $1,100, but the employers would still have to cover the agency fees. This is not inclusive of the two months agent fees that a domestic worker would have to pay.

This new guideline is the result of about four years of discussions between the association and the Philippine-based Association of Licensed Recruitment Agencies to Singapore, along with the Philippine government, Ms Jayaprema said.

Before this, employment agents would specify a lump sum for employers to pay, including a loan and fees charged by the Philippines recruitment agency and the local employment agency. This amount could significantly differ and go up to over $3,000 in fees, and the workers could spend up to seven months with almost all their wages subtracted to cover the charges.

Yesterday (24 Jan), AEA(S) facilitated a meeting for the EA Industry and Labor Attache Mr Ramon Pastrana from Philippine Overseas Labor Offices (POLO).

About 150 agents attended the briefing on the changes at the Civil Service Club in Tessensohn Clubhouse, where they had a dialogue with Mr Pastrana.

Mr Pastrana said that while the new scheme is a private arrangement, the POLO is supportive and will continue to act against agencies if there are any complaints about overcharging.

He stressed that it is illegal for Filipino domestic workers to be charged placement fees to work abroad. “This initiative is not a reason for agencies here to just go charge any salary deduction from the worker,” he said.

“The $1,100 is just a cap for the workers, to cover whatever they need in the Philippines. If the workers say they don’t need that, then there is no need for the two agencies to have a repayment scheme.”

Nation Employment director Lim Chee Chong said the new scheme helps to even the maid agencies and benefit the workers.

“Now, we shouldn’t see any agencies charging employers very low fees but transferring the costs to the domestic workers,” he said.

Chairman of the Centre for Domestic Employees, Mr Yeo Guat Kwang, said the initiative to study and set out the costs domestic workers face before going abroad to work is a good move.

“The market has been charging more than that and there is a lack of transparency, so this is one step forward towards making it clearer and also establishing a cap,” Mr Yeo said.

However, the guidelines are just guidelines for reputable and ethical companies and employers to follow if not legislated as law.

Singapore approximately has 237,100 foreign domestic workers, about 70,000 are from the Philippines.