Reflections: Salary issues faced by migrant workers

Posted by on November 14, 2016 in Articles, Facts, research, analysis

reflections_header

Most interns who spend 6 – 9 weeks with TWC2 are asked to wrap up their internship with an essay on a specific topic. Rebecca spent her mid-year vacation 2016 with us assisting with casework and the Labour Court Research Project. In the process, she came across many foreign workers who had suffered salary non-payment or short-payment.

An intern’s reflection on theory and practice: Salary issues faced by foreign workers

By Rebecca Liu

On the first day of my internship, I was asked to accompany a worker to his hearing at MOM Services Center. Hussain was quiet and withdrawn that morning, pale with nerves as he waited to be called in for his hearing. I learnt through a senior volunteer that he had not been paid for seven months, and was owed over $12,000 in wages.

Later, I learnt that there had been a complication with his case. Hussain’s employer had somehow produced signed pay slips for months he had not been paid in. Hussain knew immediately that the pay slips were forged, but it was not going to be easy to prove that to the court. Forgery! I could not believe my ears.

“What a mess,” I thought despairingly.

As I reach the end of my internship, I am struck again by that memory. I have come to realize that this “mess” is not specific to Hussain’s case, but is endemic amongst marginalized migrant workers. There are critical gaps in the system that governs foreign labor, particularly regarding the issue of salary deductions or non-payment. For workers like Hussain who have fallen through those gaps, justice is a long wait away.

The system in theory

There is a vast difference between the way our system was designed to work, and the way it plays out in actual practice.

In theory, a worker is entitled to several rights, amongst which include:

  • He must be paid his salary for the work he has done in a timely manner.
  • He will work a reasonable number of hours a week. As stated in the Employment Act, this is 44 hours a week.
  • If the employer does not have enough work for him, the Employment of Foreign Manpower Act stipulates that he must still be paid his basic salary.
  • If a worker is asked to work beyond this reasonable number of hours, he will be compensated at a higher rate for those overtime hours.
  • If the company pays for food, housing, or transport, the company may deduct reasonable allowances from the worker’s salaries. According to the Employment Act, deductions must not exceed 50% of a worker’s salary.

If a company has contravened these rights, a worker may file a claim with MOM, who will attempt to resolve the issue peacefully through mediation. If mediation fails or if there are complications regarding the case, it is escalated to Labor Court where a Commissioner for Labor will see evidence from both sides regarding the issue, before issuing a court order for an amount of payment.

The system in practice

Most workers file salary claims that relate to under/non-payment of basic or overtime salary, or illegal deductions. Illegal deductions include deductions that exceed 50% of total salary, unreasonable deductions (for example, penalties for days not worked that are more than twice the daily basic salary), or deductions for invalid purposes (for example, ‘renewal fees’: a sum usually between $1,000 and $2,000 that is deducted from a worker’s salary to ‘pay’ the company to renew their contract).

During my time at TWC2, I have noticed that workers who file salary claims face similar roadblocks in substantiating their claims and gaining a Labor Court order in their favor. I highlight these roadblocks below:

Inability to produce evidence

It was a busy Wednesday afternoon when I was pulled into a particularly difficult case. Two workers had received labor court orders; one of them, a young man who introduced himself as Billal, was to receive $2,000 out of a total claim of $16,000. It soon became clear that there was nothing we could do to help. The reason: a lack of documentary evidence.

The bulk of Billal’s claim was made up of illegal deductions for food, housing, and ‘renewal fees’. Those deductions added up to $700, out of his average salary of $1,100. On paper, each man was given a sheet with the amount of pay he would receive. This amount was the full amount, with no deductions declared. Billal would receive an envelope of money and, after counting it, would sign off on the amount. The supervisor would then remove $700 in cash from the envelope, and return $400. There was no way to prove that such a deduction had occurred.

Proving short-payment or non-payment: As seen in Billal’s case, cash payments leave no concrete paper trail, making it hard to prove that deductions or non-payment truly occurred.  A TWC2 survey, published in May 2016, found that only 65.7% of construction workers working for subcontractors (who are most likely to have cash flow problems) were paid in cash. While issuing of itemized pay slips for cash payments has become mandatory as of 1 April 2016, compliance is far from ideal. (See: One in three foreign workers still not getting itemsied payslips) Workers who do not receive pay slips may get nothing for their work.

Proving terms of employment: Terms of employment such as pay, basic hours, and amount of deductions are important in determining what a worker will be awarded. This is usually determined from a workers employment contract. Most of the time however, workers are made to sign contracts in a language they cannot read, which is immediately taken from them. When employers try to understate a worker’s salary in salary claims, workers often do not have the documentation to counter.

Proving number of hours worked: Producing timecards to calculate the salary owed to them is also difficult for workers. In many cases, they only have their own unofficial estimates to submit as evidence, as the official signed timecards are kept by the company. Workers may thus face considerable difficulty in having their unofficial timecards accepted.

Proving through witness testimony: As workers have little access to documentary evidence, witness testimony often becomes their only recourse. However, witnesses who can testify for them are often workers of the company. Such witnesses are not officially protected from repatriation or other forms of retribution after testifying against their employers. As such, it becomes difficult for claimants to find witnesses to testify on their behalf.

Falsification or manipulation of evidence

In the last week of my internship, I met Shofiqul. He had been a site supervisor, but was terminated after refusing to falsify evidence against a salary claimant. When he refused to sign false timecards understating the workers overtime hours, he was threatened with repatriation. However, since he had already paid off his agent fees, he reasoned that he could still return with a clear conscience later. It was only when his manager threatened to ‘blacklist’ him so that he could not return to Singapore, that he approached MOM for help.

As highlighted in the previous section, employers often hold potential evidence, with claimants having little access to documents. This makes it easy for evidence to be falsified or manipulated, such as in the forgery of Hussain’s pay slips. Shofiqul’s case also demonstrates that workers are extremely vulnerable to repatriation and abuse, making it easy for unscrupulous employers to intimidate workers into producing false evidence. Witness testimonies can also be distorted or falsified in such a way.

Further roadblocks in accessing rights

Previously, I highlighted roadblocks that workers face in substantiating their claims. In this section, I address the invisible portion of workers who may never file claims against their employer, despite being victims of salary transgressions. This is due to various barriers:

Signing of documents under duress: Many workers sign employment contracts under a subtle form of economic duress. They are given contracts in a language they cannot read, and in some cases, forbidden from asking any questions about the mysterious agreement. They are sometimes told, but more often it is unspoken, that if they do not sign the contract they will be immediately repatriated. They are later told that they have agreed to work overtime without pay, or at the same rate as their basic salary, or have consented to exorbitant deductions for food and housing.

Lack of understanding of rights: Workers may not understand that such agreements contravene the Employment Act, and will be rendered null and void. They resign themselves to working at lower rates, having signed a contract that they did not even understand. Workers who do understand that this is illegal may not know that they can approach MOM for help. While MOM has been ramping up efforts to spread awareness of the claims process to workers, there are still many workers who fly under the radar.

Fear of termination or repatriation: Workers who know about the claims process may still put off filing a claim, if they are receiving some pay—even if it is a fraction of what they are owed, or they are paid nothing for staggering hours of overtime work. Unlike domestic worker agencies, construction agents demand an upfront fee (on average around $10,000, which workers often incur significant debt to pay) and will not find the worker another job if they have debt outstanding upon termination. If a worker files a claim against their employer, they cannot work while their case is ongoing and will be repatriated within 21 days of their case settlement, with no chance to pay off outstanding agent fees. Workers would thus rather accept less than they are owed, already less than $3 an hour, than face repatriation when they have outstanding agent fees.

Solutions

I have highlighted loopholes in the claims process that makes it difficult for workers to get what they are due, namely, lack of access to and manipulation of evidence. I have also highlighted barriers that prevent workers from accessing the claims system. I will now propose possible solutions to close these gaps:

Electronic salary payment: TWC2 has reiterated this so many times, and to so little effect, that the idiom “flogging a dead horse” comes to mind. Minister Sam Tan has responded that two-thirds of work permit holders are paid electronically, and has also highlighted that electronic payment is mandatory upon the request of the worker— a request submitted to the employer, and not a third party authority like MOM.

By this point in my article, it is clear that unscrupulous employers can easily deny the request. A TWC2 survey also found significant discrepancy in the percentage of workers paid electronically, according to type of employer. In construction, for example, only 30.3% of those working for sub-contractors were paid electronically, while 60.6% of those working for main-contractors were paid electronically. The same survey found that sub-contractors were more likely to be responsible for salary transgressions, and that the majority of salary claimants from sub-contractors had been paid in cash. In other words, there is a correlation between cash payment and the tendency of an employer to commit salary offences.

Standard employment contracts: The UAE has recently implemented a Wages Protection System (WPS) that not only makes electronic payment necessary, but also protects workers from unfair contracts. Under this system, wage data for a worker must be submitted to the Ministry of Labor (MOL) in the form of a standard employment contract, signed by the migrant worker prior to his/her arrival. This contract is used to resolve salary disputes, even if other contracts are signed after that.

While Singapore has, superficially, a similar system, with companies being granted an In Principle Approval (IPA), an employment contract signed after the issuance of the IPA can supersede the IPA, even if the company did not seek approval for those changes. This is despite the fact that written rules require an employer wishing to lower a worker’s salary or increase the deductions to obtain his clear consent and to inform the Ministry of Manpower about the change beforehand. TWC2 has seen many cases where despite its own rule, the ministry does not sanction employers for failing to do either; in fact the ministry recognises such adversely altered terms as valid.

Power to repatriate: At this point, it becomes clear that threats of repatriation are a significant theme in migrant worker issues. Control over immigration status gives an employer significant coercive power over the worker. With this, they are easily able to intimidate or coerce workers into compliance. Migrant workers are thus extremely vulnerable to forced labor and exploitation. A system where employers do not control a worker’s immigration status would significantly reduce exploitation, but do such systems even exist?

In Canada and Hong Kong, foreign workers have two separate visas: a work visa, and a temporary residency visa. If an employer terminates a worker, they lose the right to work in the country, but may stay in the country until their residency visa expires. They may find another employer at any time prior to the expiry date, who can apply for a new work visa on their behalf. In these systems, an employer does not have the right to repatriate an employee.

Concluding reflections

During my time at TWC2, I have learnt much about the gaps in our system, and heard many opinions on how they can be fixed. When speaking of these solutions to others, I am often asked: But how prevalent is this problem? What percentage of workers will fall victim to unscrupulous employers? If it’s only 1%, should we really go through all this trouble to change the system?

The short answer is that no one knows how prevalent these offences are, because so many cases go unreported. So instead of speaking about statistics, I would like to present a hypothetical scenario: If you had purchased a house, only to find that the house has no doors or gate, what would you do? Would you reason, “only 1% of the population are thieves, therefore 99 out of 100 people to walk by my house will not think to rob it”? Probably not. Most people would just buy a gate instead of relying on the decency of humanity. After all, not having a gate is like asking to be robbed!

It is only natural that every system has loopholes. Rome wasn’t built in a day! So instead of defensively demanding quantification when flaws are pointed out, perhaps society as a whole should start finding gates to fix our system.

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.

Make a difference

help with your donation become a volunteer