How some employers cheat both the government and workers

Posted by on June 25, 2019 in Articles, Stories

In June a year ago, we wrote about the Everglory scam. It’s not confined to Everglory Construction Pte Ltd but is in fact quite a common scam. Since the first cases emerged in early 2018, Transient Workers Count Too has seen a new case every few days.

The earlier article described how the scam works. In brief, employers declare a basic salary of at least $1,600 to the Ministry of Manpower when submitting a work permit application in order to enjoy a lower foreign worker levy. However, the worker is not paid anywhere near that figure. The boss thus pockets both the savings in the levy and the wages he has stolen from his employee.

A year on, workers who were promised $1,600 as their monthly salary but did not get paid at this rate continue to stream into TWC2. The scam is alive and well. The government continues to be cheated of its levy revenue and workers of their wages. Our observation is that the ministry is still treating such cases only as civil disputes over money. That it should, but it should also go at them as a criminal offence of cheating.

Ripon (header pic) started work with Speedy Engineering and Renovation Pte Ltd around June 2017. His In-principle Approval for a Work Permit (IPA) which contains the information declared to MOM by the employer stated that his basic salary was $1,600 without additional allowances or deductions. But from the beginning, he was paid at the rate of $26 per day (roughly $676 per month). as can be seen in the extract of his August 208 salary voucher below.

Ripon’s Aug 2018 salary voucher shows the employer using $26/day as his basic rate

He spoke to the boss about it, but according to Ripon the boss’ reply was a dismissive “I pay you like that, your salary is that.”

Between October 2018 and January 2019, things got worse for Ripon. There was no salary payment at all. Soon after, he filed a salary claim at the Ministry of Manpower (MOM).

Islam Mazharul worked about two years with a general contractor business called Living Culture. He too had in hand an IPA with a basic salary stated at $1,600. By informing MOM that the employee would be paid above this threshold, Living Culture would thus have enjoyed considerable savings on the foreign worker levy. But Mazharul never enjoyed his full salary.

“Company pay me only $24 a day,” he reports. That’s roughly $624 monthly, a far cry from the promised salary in the IPA.

He tried to speak to the boss over this discrepancy, but “boss never go to working place, and when I call him, he never answer.”

Then things took a turn for the worse; for two months there was no salary at all. On 21 December 2018, “Boss wanted to send me to airport. I say cannot go home because you not yet pay my salary.” The next day, he walked into MOM to file a salary complaint.

Both Ripon’s and Mazharul’s bosses indicated from their replies to the men that they had no intention of paying the promised salary. Yet they clearly wanted to enjoy the lower monthly levy rate. This is exactly what we mean by ‘scam’. The employers are out to cheat both MOM of levies and the workers of salaries.

Hanif Abu (L) and Uddin Nasir (R) with ACRA listing of the employer

Hanif Abu and Uddin Nasir joined Xing Dong Construction Pte Ltd in August and October 2018 respectively. This would be two and four months after we published the article (Everglory scam: Productivity incentive shot to pieces) pointing out the ways employers were cheating both MOM and their employees. Since MOM has a habit of checking our website regularly, they would have been alerted to this scam. TodayOnline also mentioned this scam in a July 2018 feature. See here.

Nonetheless, Hanif Abu and Uddin Nasir, who were issued with IPAs stating basic salaries of $1,600, said no one from the authorities ever checked with them whether they were properly paid their salaries.

The duo reported severe underpayment. When they confronted their boss over the matter, “Boss say,’next month give,’ but then next month also never give,” reports Hanif Abu.

Work was irregular. The company didn’t have projects of its own and essentially loaned the men out whenever another contractor needed extra labour. “Two days have work, two days no have work, like that,” explains Hanif. They were constantly moved from one worksite to another. “Go here this week, go there next week.”

On 7 January 219, they somehow had reason to check the validity of their work permits, and found that the permits had been cancelled.

At the time of writing (late March 2019) their cases are going nowhere. “Have three, four [mediation] meetings at TADM already,” Hanif says, “but boss never come.” TADM stands for the Tripartite Alliance for Dispute Management, the approved mediation body.

Nasir: “MOM officer say this cannot settle, so we transfer or go home. But maybe can get 30%” of their claim.

The two of them are not going to recover their full salaries. The employer has obtained virtually free labour for several months. Yet MOM appears stymied just because the boss won’t show up.

Nonetheless, Hanif and Nasir are happy today because they’ve both managed to find new transfer jobs.

What’s the salary in the new jobs?

“$1,600,” says Nasir. “Same,” says Hanif.

One cannot help wondering whether this is real or yet another scam.

 

 

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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