Minimum wage will reduce temptation of illegal work

Posted by on May 5, 2013 in Articles, Facts, research, analysis, Stories

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We usually write about the situations that bring workers to Transient Workers Count Too’s Cuff Road Food Programme — injury, salary dispute, etc — but seldom about what they do to sustain themselves once their work permits are cancelled and they’re put on special passes. A condition of the special pass issued by the Ministry of Manpower is that the pass holder is forbidden from working.

Let’s look at Dilip (not his real name, not the person in the picture), whose situation is typical of many men whose injuries are not too severe.

Dilip worked for three and a half years at a shipyard, cleaning and painting the holds of oil tankers. One day, a fellow worker steadying the ladder Dilip was working on moved away. The legs of the ladder slipped, and Dilip fell.  Following this accident, he went through a process similar to that of many of the injured men we see at the Cuff Road Project:

  • He informed the supervisor of his terrible back pain
  • The company driver took him to Westpoint Hospital where he received injections for pain
  • He was referred to Alexandra Hospital where he stayed for four days
  • The doctor certified him for one month’s  medical leave
  • He attended regular doctor appointments to monitor his recovery
  • His company cancelled his work permit
  • The Ministry of Manpower issued him with a special pass

Before his accident Dilip didn’t complain about his salary or agent fees, even though his earnings were barely enough to support his family, and less than he was promised when he agreed to the job. His take-home pay with overtime was about $700 each month, but after having $120 deducted for housing and another $120 for food, he was left with only $460. He spent as little as possible on personal items such as toiletries and cellphone top-ups, and was able to send home almost $450 every month.

These remittances stopped with the accident.

After the accident Dilip’s boss told him he wouldn’t be allowed to remain in the company dormitory unless he resumed working, even though he was on certified medical leave. Such disregard for the law made Dilip fear the worst – the boss might resort to forceful repatriation agents should Dilip refuse to work while recovering. So he left the dorm and borrowed money to pay for bed space in Little India.

He approached TWC2 and registered to eat free at the Cuff Road Project.

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Desperate for money

After resting for three months, Dilip felt he was well enough to start earning money again. He’s aware that his special pass specifically states that he is not permitted to work. However, he was desperate for some sort of income; he had the room to pay for and a family to feed.

He found a Singaporean man who renovates apartments willing to hire him as a painter. He doesn’t get work every day, but his boss usually provides work for him four days per week – small jobs in flats at various locations. His boss checks to make sure the job is done well, but trusts Dilip enough that he doesn’t supervise him full time. For this Dilip earns $70 a day. He spends about $200 for his bed space, a bit for personal items and he’s been able to send home $800 a month for the past two months.

He is earning more working illegally part-time than when he was working legally full-time.

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Understanding the economics and the attractions

This arrangement suits the Singaporean boss because he needs a helper, and can’t afford a full-time worker for which he’d have to pay the monthly foreign workers’ levy, food and housing, and the one-time payments of the security bond and insurance. The boss also avoids the problems of obtaining a quota for foreign workers and the hassle of official paperwork. Given the costs, limits and quotas imposed by the government on hiring work permit holders, many employers are willing to circumvent these regulations and hire illegal workers, such as special pass holders.

In order to avoid disagreements or misunderstandings with Dilip, the boss pays him every day, and makes no promises about the following day’s work. In the same way, if Dilip is unhappy with the work, he can leave and find another job.

For the employee, it’s a situation totally unlike when he is on a work permit. In the latter case, a work permit holder is tied to the employer named on his work permit card and he is not permitted to change employers. His job may be at risk if he speaks up about unsafe or illegal work conditions, unfair salary payments, unreasonable deductions, inadequate dormitories or food. His employer may view him as a troublesome worker and terminate him before his complaints inspire others to raise similar complaints. Furthermore, employers can pass the burden of levies, agency fees and other costs on to the worker through kickbacks, deductions, fines and withholding salary. Even a small injury or fever would cause the boss to view him as a malingerer. Employers have the power to hire and fire their employees at will whilst the worker has no freedom to look for another job.

Special pass holders do participate in Singapore’s market economy where market forces determine salaries and work conditions. To see how it works, you have only to look at the type of jobs that the men on special pass go for — work where they have job flexibility, a daily salary more than three times the going rate for legal workers, and negotiable conditions. Admittedly there is risk involved for both employees and employer: illegal workers are not protected by insurance, and the Ministry of Manpower conducts regular checks on worksites and other places where men are likely to work illegally. Being caught working on a special pass could result in a warning, or more seriously, fines, jail, and repatriation for the worker, as well as a warning, fines, and jail for the employer.

Even so, many think the attractions outweigh the risks. Or, in the case of workers – and there are thousands – who are financially desperate because they’ve been on special passes for too long, there is simply no other choice.

The salary and work conditions for men working illegally while on special pass are well known to low-paid workers. While Dilip did suffer a real injury, it’s not a stretch the imagination to think that some men will falsely claim an injury for the opportunity to find work illegally, rather than remain in perpetual indebtedness while tied to their legal employer and meagre salaries. The Ministry of Manpower struggles to sift frivolous from genuine injury claims, and struggles to catch illegal workers. Enormous taxpayer-funded resources are expended on this.  But a more reasonable approach might be to insist on a transparent, verifiable, minimum wage and lighten up on the levies that are indirectly paid by the worker, so that workers feel more financially secure while on legal employment. Secondly, there’s a need to create some kind of social security scheme for workers on special passes so they can survive without breaking the law.

TWC2 is an organization that is dedicated to assisting low-wage migrant workers when they are in difficulty. We are motivated by a sense of fairness and humanity, though our caseload often exceeds our
means.

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