Additional steps needed beyond making itemised pay slips mandatory

Posted by on January 14, 2014 in News, Our Stand, Press Releases

Media Statement

For immediate release

14 January 2014

On 13 January 2014, the Ministry of Manpower issued a media statement “Tripartite Guidelines on Issuance of Itemised Payslips“.

Transient Workers Count Too (TWC2) have been highlighting for years the need to make itemised payslips mandatory, as an essential step in combating salary abuses, a common problem faced by migrant workers. We were disappointed last November when the Ministry of Manpower (MOM) reversed its position and chose not to go ahead with making it mandatory, saying that small employers face difficulty in complying. MOM has now indicated, in its statement of 13 January 2014, its intent to implement this rule within two years.

TWC2 would prefer that an earlier date for compliance be given to medium and larger companies, e.g. employers of more than 20 workers, e.g. within six months. Such companies should already have the resources to issue itemised payslips.

However, we wish to reiterate that itemised payslips alone will not be sufficient and that the problem of incorrect and under-payment of salaries will persist if additional measures are not also taken. Some of the ways by which employers unjustly treat foreign workers salary-wise are:

1.         The calculations on the payslip are correct, but the cash stuffed in the envelope is a lower amount; the worker is told to sign in acknowledgement that he has received the full amount otherwise he will lose his job and be instantly repatriated.

To address this problem, several additional measures need to be taken:

(a)       It should also be mandatory for employers to pay salaries through bank giro or with a bank cheque, so that an audit trail is available showing the actual amount paid.

(b)       The present system tying a Work Permit holder to an employer has to be changed, since it invests power in the employer to threaten immediate repatriation. TWC2 has argued that Work Permit holders, leaving one job for whatever reason (whether terminated by employer, or resigning of his own accord, but excluding situations of criminal conviction) should be allowed up to 60 days to find another job (subject to the new employer having entitlement to employ foreign workers).

2.         The calculations on the payslips are correct, except that a deduction for repayment of a previous “advance loan” is shown. This deduction lowers the nett salary for the month. The worker protests that he had not taken any advance loan, but it is easy for the employer to create a Payment Voucher with a forged signature to show that he had. Proving forgery is difficult, time-consuming and costly in terms of police and forensic resources, and it may not always lead to a conclusive determination.

To address this problem, TWC2 has argued that advance loans should likewise be paid through bank electronic transfer or bank cheque, and such a provision should be written into legislation or by-laws. Any handing over of cash should be presumed to be a gift with no enforceable right of repayment, and not a loan. Any deduction from salary ostensibly for repayment of “advance loan” should not be valid unless backed up by an audit trail of bank cheque or electronic transfer.

3.         The calculations on the payslip are correct, and the total correct salary is paid by bank giro, but the employer demands that the worker withdraws a specified sum from an ATM and hand this cash amount back to him or his designated agent.

TWC2 recognises that this can be hard to police. Existing provisions banning kickbacks are already in place, but it needs active enforcement and greater publicity for prosecutions as deterrent.

Simultaneously, removing the linkage between employer and the work permit holder’s right to a job — as described in 1(b) above — would also help. When a worker no longer fears repatriation because he has an opportunity to seek another job if he is unhappy with his existing employer, he is more able to resist such demands for kickbacks.

As the above examples show – all based on actual experiences reported by many migrant workers to TWC2 – there remain many ways by which employers can underpay their workers if they are determined to do so, effectively circumventing a requirement for itemised payslips.

MOM should remain highly conscious of the distinction between what is shown in theory on the payslip as payable and what is actually paid. One must be careful not to be lulled into thinking that the figure on the payslip represents reality.

We urge MOM to enact and implement the additional measures we have outlined above to close these foreseeable loopholes.

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

Make a difference

help with your donation become a volunteer