In March 2016, Minister of State for Manpower Sam Tan told Parliament that the government was not prepared to make bank payment of foreign worker salaries mandatory. He gave a few reasons which the section ‘Discussion’ below will address.

TWC2 felt it would be worthwhile to do a simple survey to check what male work permit holders themselves preferred. We also wanted to find out what proportion of workers are currently paid via bank, and in cash.

The survey found that about 43 percent of male workers had been paid their salaries through bank giro, while about 55 percent were paid in cash.

Of those who received salaries via bank, 91% expressed a preference for the existing payment mode — bank payment. Of those who received salaries in cash, 72% preferred a switch to bank payment. Overall, 80% of respondents said they’d prefer their salaries through the bank.



Objective of survey

The objective was a straightforward one: to determine if male work permit holders in construction and marine sectors had a preferred payment mode for their salaries.


Profile of respondents

This survey, led by TWC2 volunteer Balambigai Balakrishnan, was conducted in the last week of April 2016 among 301 men (46 Indians and 255 Bangladeshi workers) participating in TWC2’s free meal program, The Cuff Road Project. The meal program is available to workers who have faced an injury, salary or other kind of problem, and filed a claim with the Ministry of Manpower. Whilst they are not currently working, the question about salary payment mode was put to them in relation to their most recent job. In almost all cases, this would be just a few months ago.

The survey was available in both Bengali and Tamil scripts, and the questions were also explained verbally.


Contextual background

Transient Workers Count Too has long advocated that salaries of Work Permit holders should be paid through bank. This is based on our observation that many workers in companies which adopt a practice of paying in cash, find that when they need to prove that they had not been paid or been short-paid, they have difficulty doing so. Cash transactions do not leave an unambiguous documentary trail.

On 1 April 2016, the Ministry of Manpower (MOM)’s new rule that employers must provide detailed itemised payslips came into force. This is an improvement over the previous situation, where employers didn’t even have an obligation to show how salaries were calculated.

However, TWC2 has pointed out that itemised salary slips alone do not go far enough to address a widespread salary non-payment and under-payment problem. So long as employers are free to pay salaries in cash, the itemised payslip may say one thing, but the actual cash handed out may be a different amount. The worker is still left with no documentary proof that he received less than what he should get. Worse yet, the existence of an itemised payslip may disadvantage him, since it could be brandished as prima facie proof of payment. On the other hand, payments to a personal bank account would give them evidence of the timing and the amount paid, essential in lodging a successful salary complaint.

Even countries in the Middle East, such as the United Arab Emirates and Qatar, have laws in place requiring payment through bank. Singapore is behind these countries’ standards.


Findings – mode of payment in most recent job

The tables below provide a breakdown of the responses by employer type, sector and mode of salary payment.


A few striking observations can be made. Larger companies (main contractor) are more likely to pay via bank. The most unstable companies (subcontractors and manpower supply companies) are more likely to pay in cash. These are the same companies that have a greater likelihood of cashflow difficulties or poor book-keeping, and consequently are more likely to be unreliable paymasters.

This seems to be borne out by the findings of this survey when we zoom in to the subset of respondents who came to TWC2 with salary problems. There were 27 of them.


Although main contractors were employers of 33% of our sample, only 15% of salary cases (4 out of 27 such cases) had been employed by main contractors. In contrast, subcontractors were employers of 50% of our sample. But 78% of salary cases emerged from among their employees (21 out of 27 cases).

Another way to look at the data is to see whether salary cases correlate with cash payment. 55% of the sample (166 out of 301) were paid in cash. But among workers with salary problems, 81% (22 out of 27 cases) were paid in cash.

These men are again particularly vulnerable to a lack of documentation to prove their claims.

It may be that whether we make it mandatory to pay salaries through bank, these same companies (subcontractors, etc) with cashflow difficulties or shoddy book-keeping will still be salary-errant. However, if it had been mandatory to pay through bank, their workers would have had access to better documentation, making it easier to determine if the claims are valid. The complaints become easier to resolve. It is not only a matter of justice, but speedier resolution also means that the men can move on more quickly to new jobs.

Moreover, it stands to reason that if employers know it will be harder to get away with salary mischief through bank giro, they will be more diligent and there will be a reduction in the number of salary cases. This will reduce the workload at MOM itself.


Findings – preferred mode of payment

As mentioned in the opening section, of those who received previous salaries via bank, 91% expressed a preference for bank payment. Of those who received previous salaries in cash, 72% preferred bank payment. Overall, 80% of respondents said they’d prefer their salaries through the bank.


Some of the reasons given by respondents (in their own words) for preferring salaries via bank giro over cash payments are:

  • Cash give, sometimes money less give. Bank no less give. Cash give sometimes less 10 dollars give, 20 dollars less or 100 dollars less
  • Delayed payment, no schedule
  • Don’t give full amount, give in parts
  • If I had a bank statement here, I can apply for a bank loan in India
  • Money gets stolen, no safety
  • No savings (harder to save money)
  • No voucher, when accident like this problem, no proof to show salary
  • Safety (don’t have to store or carry cash)
  • Boss say one amount, give different amount, then later say, given full amount, no proof
  • Sometimes deduct money (from cash amount)
  • Wife has account – bank more convenient

Unsurprisingly, many respondents indicated that the problem with cash payment is the lack of proof of payment.

What about the minority — the 16% who preferred cash? Some felt that their poor English would disadvantage them in managing a bank account. TWC2 executive committee member Debbie Fordyce also urged a more nuanced reading of the figures. She said, “It’s possible that those men who are assured of receiving their salary have the luxury of stating a preference for cash payments, and those with less secure salary payments would prefer Giro/electronic bank transfer.”



cash_or_bank_sam_tanOn 14 March 2016, Minister of State for Manpower Sam Tan (pic at right) told Parliament that the government was not intending to make it mandatory to pay salaries through bank. The extract from the Hansard can be seen in the footnotes. He stated that “our laws already require employers of work permit holders to pay salaries electronically if the workers make the request.”

In saying this, he does not appear to be cognizant of a simple reality: any foreign worker who has the “gall” to ask his employer to vary his payment mode will be seen to be acting “above his station”, and will almost surely be penalised for it. This can easily mean losing his job, since employers have full freedom to terminate employment without giving any reason. Tan was asked by Member of Parliament Louis Ng to clarify what actions MOM would take if a company rejected a worker’s request for bank payment, but Tan did not give a specific reply.

Perhaps for good reason: MOM in actual fact will be unable to take any action at all.

In practical terms, the employer, if asked by MOM why a worker was terminated will possibly give some spurious reason (e.g. that he was lazy or disobedient) which the ministry has no right to question, even if the real reason is that the worker asked for electronic payment of salary. In effect, the ministry is toothless despite the legislation.

In any case, considering the reality that workers typically pay thousands of dollars to secure the jobs in the first place, no worker will even wish to risk his job by making such a request. This right to ask for bank payment that Sam Tan mentioned is not one that these workers can assert.

Our findings from the survey bear out this assessment. Over 70% currently paid with cash want a switch to bank. The fact that they have not exercised this “right” strongly supports our argument that the “right” is not a realistic one.

Continuing, Sam Tan said, “Today, two-third of these workers already receive their salaries electronically.”

This proportion was not reproduced in our survey. Among the 301 men we surveyed,  only 43% received their salaries through a bank. A likely reason for this difference between Sam Tan’s proportion and the results of our survey is because we are looking at different populations. Tan spoke of “work permit holders” which are a varied group that includes domestic workers as well as Malaysians working in jobs alongside Singaporeans, and who are therefore treated by employers in the same way they would treat Singaporean employees, including salary mode.

TWC2’s survey was tightly focussed on male work permit holders who ate with us at our meal programme. They were all either Indians or Bangladeshis, with a majority (65%) in construction. Our survey sample is closer to the stereotypical male foreign worker working in companies that rely heavily on foreign worker staff. We found that only 43% were paid through bank (compare: Sam Tan said two-thirds), while 55% were paid in cash. A handful were paid either by cheque or a mix of bank and cash payments.

Explaining why MOM would not adopt a rule requiring payment through bank, Tan said that “during consultations with unions, workers and employers, some have expressed a preference for flexibility.”

He cited how “some workers have also preferred to receive their salaries in cash. They say they will face difficulties in maintaining a minimum sum account balance, as required by the banks, or be charged a fee, if their bank accounts do not meet the minimum sum requirement. Similarly, some small and micro-SME employers like family-run shops also expressed difficulties in paying salaries electronically as they would need to incur additional administrative costs and resources to perform this task.”

The above contains an internal contradiction that reveals how his explanation is poorly thought out.

The internal contradiction can be teased out from his saying that small businesses have difficulty performing salary payments through bank. However, he had, moments earlier, said that work permit holders have a right to ask (and implicitly, to have that right satisfied) for salary payment through bank. In other words, whether or not it is difficult for the employer to do so, the employer must do so once a worker asks for it. Therefore the stance (as conveyed by the minister’s rejection of mandatory bank payment) that since a small employer has difficulty making bank payments, he should be excused from doing so, is actually insupportable. Conferring the right on the worker cannot be squared with excusing the employer from performing a bank payment. Either the ministry is paying mere lip service to the “right” or misleading employers about their choice in the matter. It cannot be both.

It is worthwhile noting that the right to salary payment through bank is written into law (subsidiary legislation of the Employment of Foreign Manpower Act). The only way the ministry can live up to its stance that employers are excused from paying salaries through bank even if a worker asks for it, would be to ignore its constitutional duty to abide by the law.

On a more macro level, there are two more issues that should be further explored. The first is related to a larger question of universal access to basic banking. In any sophisticated economy, this should be a right. It adds value to the society as a whole, through efficiency gains among other virtues, if every person in that society has access to a common financial platform. It is incompatible with Singapore’s dream of a cashless society if we do not mandate universal access to basic banking.

Undoubtedly, there are costs involved for the banks. But it should be seen as part of their corporate social responsibility to absorb these costs for the lowest-wage earners.

cash_or_bank_smallbizThe second issue — difficulty for small businesses — is easily addressed by having a threshold. This is provided that the ministry is of a mind to remove the right (written in law) for workers to ask for payment through bank — a move that would be regressive. Nonetheless, at a conceptual level, it could be possible to say that any business with more than, say, five, work permit holders, can have electronic payment made mandatory for it. The documentary trail provided by this alone will be of help in a large majority of salary disputes. Over time, the rule can be applied to the smallest employers too.

Given the ease, under present conditions, with which employers are able to deprive migrant workers of their full salary, the difficulty of lodging a complaint without adequate evidence of salary payments, and the distressing repercussions of losing the job, TWC2 feels it is imperative that more pro-active measures are put in place.

This survey’s findings reinforce this by showing how a huge majority of foreign workers prefer banked-in salaries. Comments provided by survey respondents indicate how they see bank giro as a more secure mode of salary payment.

Bank payment is the way to go, as even the UAE and Qatar have realised. Making mandatory the issuance of itemised salary slips (as MOM did in April 2016) is a positive step, but the requirement for electronic payment of salaries is much needed too. It is another important element of security to the most disadvantaged workers in Singapore.



Extract from Parliament reports, 14 March 2016:

Mr Louis Ng Kok Kwang asked the Minister for Manpower whether the Ministry will consider requiring employers to pay work permit holders through an electronic payment system given that this is already required of employers of S Pass holders.

The Minister of State for Manpower (Mr Sam Tan Chin Siong) (for the Minister for Manpower): Mdm Speaker, our laws already require employers of work permit holders to pay salaries electronically if the workers make the request. Today, two-third of these workers already received their salaries electronically. To enhance this further, since October 2014, Ministry of Manpower (MOM) introduced an online facility to allow employers to open bank accounts for their work permit holders automatically when they apply for their work permits.

Mdm Speaker, we had studied whether we should make electronic payments mandatory. However, during consultations with unions, workers and employers, some have expressed a preference for flexibility. So, some workers have also preferred to receive their salaries in cash. They say they will face difficulties in maintaining a minimum sum account balance, as required by the banks, or be charged a fee, if their bank accounts do not meet the minimum sum requirement. Similarly, some small and micro-SME employers like family-run shops also expressed difficulties in paying salaries electronically as they would need to incur additional administrative costs and resources to perform this task.

Nonetheless, Mdm Speaker, my Ministry will continue to conduct periodical policy reviews, and we will continue to monitor the situation and review our laws to ensure that adequate convenience and protection will be put in place for our workers.

Mr Louis Ng Kok Kwang: I thank the Minister of State for the reply. Just one clarification – if the worker does request to be paid by Electronic Payment System and the company rejects, can he/she then seek help from MOM? And what actions will MOM be taking?

Mr Sam Tan Chin Siong: Mdm Speaker, I thank the Member for the supplementary questions. Under our existing law, we have already mandated employers to make electronic payment provision mandatory for the workers, if they make the request. If any workers who have found that their salaries are not paid on time or paid in full sum per their contract, they can always approach MOM for assistance and let me take this opportunity to advertise MOM’s telephone numbers. For workers who have difficulties in salary matters or other manpower matters, they can always dial the MOM hotline number at 64385122.