One third of male migrant workers aren’t paid what they’re due

Posted by on July 8, 2014 in Articles, Facts, research, analysis

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About one in three migrant workers are not paid what they are due, a survey by Transient Workers Count Too has found. However, even as two-thirds think they are correctly paid, about half of them actually have no means to verify that that is so. Only one in three foreign workers can be sure that their salaries are correct.

salary_survey_nutshellThe survey covered 328 male foreign workers in various parts of Singapore.

Mapped over the fact that that there are about 400,000 foreign Work Permit holders (excluding Malaysians) in non-domestic jobs in Singapore, this means that each month, about 140,000 workers are not correctly or not promptly paid and another 140,000 have no way of knowing whether what they received is correct.

For the first group (shown in red in graphic at left), the chief device their employers use for paying them less than what they are due is the ‘savings money’ deduction. More details further down.

For the second (dark blue) group, they seem to be operating on trust because further questions revealed that they didn’t get any salary slip with sufficient detail to enable them to check the salary computation.

The survey was conducted alongside TWC2’s monthly outreach, where on one (occasionally two) Sundays a month, our volunteers fan out to areas where foreign workers gather to enjoy their day off. In addition to handing out information leaflets, we conducted the one-page survey with a random 5 – 10 percent of the workers we leafletted.

salary_survey_pie1The survey was conducted over a period of seven months October 2013 – April 2014, at various locations, ranging from Tampines to Boon Lay to Sembawang.

Only male, non-Malaysian migrant workers on Work Permits were included in the survey.

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Were you paid at all?

The first question simply asked if they had received the previous month’s salary. Since all surveys were conducted in the second half of a month, it would have been a violation of the law if their employers had still not paid their previous month’s salary by then.

About five percent said the previous month’s salary was still outstanding. Another 2.7 percent said that they had only received a portion of the previous month’s  salary.

TWC2 knows from our casework that an oversimplified question like that can give misleading answers. So, additional questions were asked of those who said they had been paid.

The first additional question was whether the amount paid was correctly calculated. 1.5 percent said they were sure it was not. Multiple reasons were given: wrong basic salary used in computation; overtime pay incorrectly calculated, excessive deductions, etc.

The second additional question was whether the salary paid had suffered a ‘savings money’ deduction. 23.5 percent of workers said it had.

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Another 3 percent said they weren’t sure whether the amount paid to them was correctly calculated, or whether any ‘savings money’ deduction was applied.

That left only 64.3 percent who said they had been paid an amount that was correct, but further down it will be explained that even this figure means much less than it appears.

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‘Savings money’

Given the large number of workers who suffered a ‘savings money’ deduction, it is necessary to explain a bit more what this is. It is an arbitrary and illegal amount that is held back from a worker’s monthly salary, on the purported claim that the employer was helping the worker save. When queried, bosses often assure their employees that the money will be returned in full “when go home time”.

With such an ‘explanation’, workers are led to think that even if this deduction is applied, their salary is still correct, in the way that Singaporeans see a CPF deduction each month without thinking that their salary is wrong. That was why in the survey it was necessary to ask a ‘savings money’ question separately from the ‘was it correct?’ question.

It also shows how unclear workers are about the legality of this ‘savings money’ deduction. Some, seeing how widespread the practice is,  simply assume it is customary and legitimate practice in Singapore.

The dollar amount deducted varied quite a lot. Of the 77 workers who reported this deduction, the smallest amount deducted was $16, the largest $300. The average among these 77 workers was $68.30, which would be about 8 to 10 percent of a typical Work Permit holder’s gross monthly salary.

Do bosses return the ‘savings money’ as promised at the end of the contract? While many workers report that they do not, it will take another survey to establish this more clearly. It is not difficult for bosses to come up with reasons for refusing to return the money. These (based on cases TWC2 has seen) include

  • terminating a worker prematurely, and then telling him that since he had not completed the full contract, he wasn’t entitled to any refund;
  • telling the worker that the accumulated ‘savings money’ had been used to buy his air-ticket home, and if he insisted on getting the money back, then he should buy his own airticket*;
  • telling the worker that the money was used to cover administrative charges to renew his Work Permit*;
  • outright denial that there was any promise to refund the money.

*Illegal for employers to do this.

It is not easy for workers to lodge a complaint at MOM over ‘savings money’ because doing so means they will instantly lose their jobs altogether. Even if they do lodge complaints, proving that such deductions had occurred can be difficult especially when they are paid in cash.

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Payment mode

salary_survey_pie3Of the 303 workers who were paid for the previous month, slightly more than half received their salaries through bank giro. This only proves that paying foreign workers through giro is a perfectly viable method, despite MOM claiming that it would be a burden on employers to make this mandatory.

42 percent were paid in cash.

The widespread ‘savings money’ problem is one of the reasons why TWC2 has strongly urged the Ministry of Manpower to make it mandatory for employers to issue detailed itemised payslips AND to require payment through bank, so that there is an audit trail to show whether or not a worker was correctly and fully paid.

MOM has indicated the pay slips will be mandatory “by 2016”, but has made no indication on payment through bank — without which mandatory payslips will remain ineffective.

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This worker had no idea how the initial figure of $656.38 was arrived at, then suffered arbitrary deductions of $75 and $200. Net take-home pay $381.

This worker had no idea how the initial figure of $656.38 was arrived at, then suffered arbitrary deductions of $75 and $200. Net take-home pay $381.38

‘Salary paper’

The survey also asked the 303 who were paid whether their salary was accompanied by a ‘salary paper’ — the closest equivalent in foreign worker-pidgin for pay slip. The results from the question are messy and hard to interpret.

About 80 percent said they were handed a ‘salary paper’ last month, but we knew that here too it would be negligent to merely take this at face value.  Many workers who receive their wages in cash get little more than a used envelope with a number (or a few mysterious numbers) written on it.

So we had to be careful: What exactly did workers mean when they said they received a ‘salary paper’? Does it mean what we expect it to mean — a clearly itemised computation of their gross and nett salaries?

For a follow-up question, we showed participants three different samples.

Sample A was a kind of payslip with sufficient details about

  • basic salary,
  • the hours of overtime,
  • the overtime pay rate,
  • Sunday and holiday pay rate,
  • allowances,
  • deductions, etc
How a clear and transparent payslip should look (click to enlarge)

How a clear and transparent payslip should look (click to enlarge)

to enable a worker to verify computational accuracy.

Sample B was little more than a time card, with no dollar calculations, while Sample C was an example of an envelope like the one pictured above. Neither B nor C met the standard of an acceptable pay slip.

It turned out that only about half the 80 percent who said they were given a pay slip received something that resembled Sample A. In other words, the other half did not really get a pay slip even though they thought they had.

However, it was observed during the survey that respondents seemed to take a while before they landed on their answer, so our confidence over the findings on this question is not high. A possible reason is that pay slip formats varied so much from company to company that our handful of samples simply didn’t encompass the range. Many workers could have found our question and samples confusing. Perhaps a separate survey may be needed in future to better research this subject.

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Did 64 percent actually get correct salaries?

Above, the pie chart titled ‘Last Month’s Salary’ indicated that 64.3 percent told us they received a salary that was correct. They did not suffer any ‘savings money’ deduction either, they said. But, now, following the discussion about crummy pieces of ‘salary paper’,  it may be worth re-examining how those 64.3 percent (211 workers) knew that the salary was correct, as they claimed.

Of these 211 men, only 95 (29.0 percent of total 328) said they received a ‘salary paper’ that looked like our Sample A.  The rest (116) either received a substandard pay slip that didn’t contain enough detail to verify the computation, or didn’t get a pay slip at all. So how could these 116 be confident that their salaries were correct?

Or, to put it another way, fewer than one in three workers (29.0 percent) could confidently say that their previous month salary was paid on time and correct. These 29 percent are shown as the bright blue quadrant in the pie chart below:

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‘Renewal money’

The survey didn’t ask about “renewal money”. This is the payment that employers demand from workers for the privilege of having their Work Permits renewed. From our casework, we know that a substantial minority of workers are asked to pay for renewal, even though this is illegal. The amount varies from $500 to $2,000 for a 12-month renewal of the work pass.

Since workers seldom have so much cash upfront, bosses deduct the amount from salaries over a few months. They usually do not deduct evenly through the course of a year, but deduct, say, $500 per month over three months, or $400 per month over four months.

Because these deductions are not evenly spread out, we decided not to include it in the salary survey since they might further complicate the results.

However a separate survey on this may be warranted since our casework experience suggests that it is quite widespread.

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Respondents’ profile

The last two pie charts show the profile of the 328 respondents. The mainland Chinese seem to be under-represented in the sample, mostly because few TWC2 volunteers doing outreach during those months could speak Chinese.  It is however impossible to say how under-represented they are because we have no statistics to compare with. MOM has not released any breakdown of migrant workers by nationality. Nonetheless, we do not think that this skewed the overall findings because, based on our experience in casework, the problems of non-payment, incorrect payment and savings money are across the board, affecting workers of all nationalities.

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About two-thirds of the respondents were in construction. We think this is quite representative, because MOM has reported that there are about 319,000 construction workers out of 770,00 non-domestic workers. But 370,000  of these 770,000 are Malaysian, and there are not many Malaysians nowadays in construction. In other words, most of these 319,000 construction workers would be from among the 400,000 non-Malaysians.

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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