Salaries should be paid in full within 7 days — the legal basis

In a booklet distributed by the Ministry of Manpower to Work Permit holders, titled ‘A Guide for Foreign Workers’, there is a brief mention of when employers are supposed to pay their workers. It says:

Payment of Salary

You should receive your salary at least once a month and within 7 days after the salary period. Salary for overtime must be paid within 14 days after the end of the salary period.

Salary deductions cannot be made by your employer unless it is for the following:

• Absence from work;
• Cost of meals supplied by the employer;
• House accommodation, amenities and services;
• The recovery of advances, loans or adjustments of overpayments of salary.

Unfortunately, the booklet does not inform workers whether there are any ceilings for the above permissible deductions. Nor is there any legislation, as far as TWC2 can discover, that controls the maximum deductions. Even so, the deductions should be subject to tests of reasonableness and backed by objective costs. It also appears that as administrative policy, the Ministry of Manpower considers the amounts declared in the Work Permit application prior to the worker taking on the job, to be binding; see Employer’s Kit. That said, it is unclear if in practice, the ministry monitors or enforces these commitments, since workers continually raise complaints over these issues.

The booklet goes on to explain to workers the following:

Hours of Work and Overtime

Your contractual work hours should not exceed 8 hours a day or 44 hours a week unless you perform shift work. Working hours do not include breaks allowed for rest, tea and meals.

All work in excess of your contractual working hours shall be considered as overtime work. You can claim overtime pay which is one and a half times your hourly basic pay.

Rest Days

You are entitled to one rest day each week, without pay. But if your employer asks you to work, you will be paid two days’ pay.

If you request to work on your rest day and your employer agrees, you will be paid one day’s basic pay.

Public Holidays

You are entitled to paid public holidays. Your employer is required to pay you even if you do not work on public holidays. If you work on the public holiday, your employer should pay you 2 days’ salary.

The term “basic pay” is used in the booklet. The Ministry of Manpower considers the salary stated in the Work Permit application and thence in the In-principle Approval (IPA) to be the contracted basic pay. The IPA is sent to the prospective worker in his home country prior to his travelling to Singapore. This is explained on this page of the Ministry of Manpower’s website:

From June 2011, the Work Permit In-Principle Approval (IPA) letters for foreign workers (non-domestic) will carry new features. There will be separate letters for workers and employers and the letters will also be in the workers’ native language. This is part of our on-going efforts to make our communications to employers and their foreign workers clearer and more transparent.

(See also the Employer’s Kit quite prominently placed on the ministry website, or the archived copy here.)

—

Relevant legislation

The above advice to workers on salaries is backed by legislation, namely the Employment Act, the Employment of Foreign Manpower Act and the latter’s subsidiary legislation, the Employment of Foreign Manpower Regulations.

With respect to the hours of work, Section 38 of the Employment Act says:

Hours of work

38.—(1)  Except as hereinafter provided, an employee shall not be required under his contract of service to work

(a) more than 6 consecutive hours without a period of leisure;

The term “period of leisure” means a refreshment or meal break in layman’s language. Other provisions in the Act permit slight variation of the “8 hours in one day rule” allowing up to nine hours on a particular day, but nevertheless stipulate that the weekly total should not exceed 44 hours. This period of 44 hours is the basis for the “basic pay”.

However, it is important to note that no worker may accumulate more than 72 hours of overtime a month. Section 38(5) of the Employment Act says:

38 (5)  An employee shall not be permitted to work overtime for more than 72 hours a month.

—

With respect to payment of salary  (also known as “basic pay”), Sections 20 and 21 of the Employment Act say:

Fixation of salary period

20.—(1)  An employer may fix periods, which for the purpose of this Act shall be called salary periods, in respect of which salary earned shall be payable.

(2)  No salary period shall exceed one month.

Time of payment

21.—(1)  Salary earned by an employee under a contract of service, other than additional payments for overtime work, shall be paid before the expiry of the 7th day after the last day of the salary period in respect of which the salary is payable.

(2)  Additional payments for overtime work shall be paid not later than 14 days after the last day of the salary period during which the overtime work was performed.

This is echoed in the Employment of Foreign Manpower Regulations, Part I paragraph 7 and Part II paragraph 6 both say:

The employer shall pay the salary (including allowances) due to the foreign employee not later than 7 days after the last day of the salary period. Any salary period agreed between the employer and the foreign employee shall not exceed one month.

—

No such thing as ‘daily-rated’

The salary (or “basic pay”) is the minimum compensation (so long as the employee does not resign or is not terminated midway through the month) regardless of whether or not the employee is assigned any work. This is evident from the language of Part II paragraph 7 of the  Employment of Foreign Manpower Regulations, which says:

Except where the foreign employee is on no-pay leave outside Singapore, the employer shall, regardless of whether there is actual work for the foreign employee, and subject to any written law, pay the foreign employee no less than the fixed salary amount declared in the application for a Work Permit submitted to the Controller.

However, many companies continue to ignore the above and treat their workers as “daily-rated” employees. They do this by converting the salary (“basic pay”) into a daily or hourly rate. Then they assign workers to less than 44 hours’ work per week — some days, they tell the workers that there is no work available — and thus pro-rate the salary by the reduced days or hours. This practice is contrary to law.

In other words, an employer should not say “I didn’t assign you any work for 13 days this month, so I will cut 13 days’ pay.”

Yet, when workers report to TWC2 how they ended up with unjustifiably low wages, this “daily-rated” practice is often cited. Workers also report that after they have lodged complaints with the Ministry of Manpower, their employers, in defending the low wages paid, often submit calculations applying this “daily-rated” method, treating the days when they chose not to assign work to their employees as “no-pay leave”, often amounting to ten to twenty days in a month.  The regularity of these complaints suggest that ministry officials accept such methods of calculation as valid even when it appears to be illegal.

See also Fact sheet: Correct way to calculate salaries (non-domestic workers).