TWC2: MOM advisory on slashing migrant workers' wages by 25 per cent "indefensible"; Govt should include migrant workers in Jobs Support Scheme

The Ministry of Manpower (MOM)'s advisory to employers on slashing their migrant workers' wages by 25 per cent is "indefensible" and "extraordinarily regressive", said migrant labour's rights non-profit organisation Transient Workers Count Too (TWC2). In a statement on Mon (13 Apr), TWC2 highlighted that the advisory runs contrary to Prime Minister Lee Hsien Loong's assurance that the Government has "worked with employers to make sure they’ll be paid their salaries and can remit money home". The MOM advisory, specifically issued for the circuit breaker period until 4 May, on the other hand, contains the suggestion that employers may "institute a 25% pay cut for foreign employees" if they wish to do so, according to TWC2. Paragraph 18.2.2 reads as follows:

18.2.2 Employers must treat their foreign employees fairly and responsibly taking into consideration the levy waiver and rebate provided by the Government. For example, for a low-wage work permit holder who is staying at a purpose built dormitory and drawing a basic pay of $600 per month, a responsible employer can pay the foreign employee $450 as salary and also for his food and accommodation during Circuit Breaker. However, the foreign employee would forego his work-related allowances, such as his transport and shift allowances of $400 per month.

Further, said TWC2, MOM's use of "reduction in the salaries" in Paragraph 21 affirms the intention of Paragraph 18.2.2, as seen below:

21. Employers that implement cost-saving measures during the Circuit Breaker between 7 April and 4 May 2020 (inclusive) must notify MOM if the cost-saving measures result in more than 25% reduction in the salaries of their employees and the employer has at least 10 employees.

While the advisory mentions "mutually agreed salary and leave arrangements", TWC2 stressed that "the poor bargaining power of foreign workers"--due to a lack of freedom in changing jobs and employers as a result of having work passes linked to specified employers--meant that any so-called mutual agreement obtained from these workers "must be suspect". "Without the right to alternative employment, they do not have the free will necessary to give meaning to “mutual agreement”. "In such a context, MOM’s words simply allow employers to drive coach and horses through existing terms of employment," said TWC2. "There is serious dissonance between what the PM said and what MOM is saying," said TWC2, noting that migrant workers "are already earning ridiculously low wages". "[A]nd yet MOM suggests a further reduction," the organisation added.

Reduction of salaries of migrant workers "designed for permanent lowering", not for temporary periods as suggested in MOM advisory: TWC2

TWC2 also noted that MOM’s mechanism for lowering salaries of foreign workers is "designed for permanent lowering, not for a temporary reduction" referred to in its advisory for employers during the circuit breaker period. "If employers, eager to take MOM’s suggestion under 18.2.2 to lower salaries, use MOM’s mechanism to implement a reduction, the reduction will be a permanent one that modifies employees’ terms of employment well into the post-Covid period," warned TWC2, adding that such a move will open "the door to massive abuse" of low-wage migrant workers in Singapore. "There is a huge risk that employers will use MOM’s Advisory as blessing to deprive workers of 25% of their wages on a permanent basis. "This will create massive resentment that cannot be good for labour relations in Singapore or for our country’s reputation," said TWC2. The advisory, added TWC2, is also couched in "confusing" language. "It will be rare that any foreign worker can make any sense of it. Even employers will find it very difficult to parse. The result will be employers interpreting it in ways that suit them best and riding roughshod over the nuances of the Advisory regarding their other obligations. "If the intention of MOM is that employers should pay, then MOM should issue an explicit directive, otherwise it will be widely ignored and employers may make salary deductions to cover the cost of food and accommodation," said the organisation.

Govt should extend Jobs Support Scheme to low-wage migrant workers: TWC2

TWC2 said that while MOM's move to allow a foreign worker levy waiver is a good one, the Government should -- instead of suggesting that employers cut their workers' salaries -- support employers’ costs by extending the Jobs Support Scheme (JSS) to cover low-wage migrant workers. The JSS, currently limited to resident workers, enables employers to receive up to 75 per cent wage subsidies per worker across all sectors, subject to a salary cap. "If we extended EJSS to Work Permit holders, our estimate of extra cost to the treasury, based on the assumption that $600 a month would be the typical salary, would be 1 million work permit holders x average $600 a month salary x 75% = $400 million. "Adding $400 million to the enhanced JSS bill for April (now about $5.1 billion) is just an increase of 8%," said TWC2. "Perhaps MOM wants to make it easier for bosses to keep employees on their payroll instead of cancelling work permits. "If so, a simple directive that no work permit can be cancelled during a Circuit Breaker period should suffice. Making it so complicated and so open to abuse, as this Advisory does, is bad policy," said TWC2.