Anatomy of an S-Pass scam

By Darren Oei

Rama, a forty-ish Indian national, comes up to TWC2 volunteer Alex, giving him an update to his case. Alex nods and says “Good, that’s good,” though I can’t make sense of what Rama is saying.

Then for some reason, Rama turns to me and continues telling me his good news, but he soon realises that my face is a huge blank.

Alex helps out. “His case is an S-Pass scam,” he says — but his words are like water on glass; they sit there doing nothing, not sinking in. I don’t even know what an S-Pass is.

Rama helpfully tries to explain: “My permit [was an] S-Pass, not Work Permit.” I am still none the wiser, feeling like I’m at the bottom of the class.

Apparently, foreign workers hold two different kinds of work passes. Those with lower skills and salary get Work Permits — they form the vast majority. Those with higher skills and a salary above $2,500 a month are issued S-Passes. The foreign worker quota rules are the same, but employers of S-Pass holders pay a lower levy rate — in general.

Rama’s documents contain all the clues that are needed. Rama arranges them in chronological order and Alex patiently takes me through them.

Starting from the beginning, there is an employment contract dated 28 November 2016 between Hong Sheng Global Enterprises and Rama stating a basic salary of $2,600 a month. Curiously, there is also a clause concerning overtime pay at a rate of $18.75 per hour. According to the Employment Act, it is not mandatory to pay overtime if an employee’s salary is over $2,500 a month, but neither does it forbid overtime payments. So, the overtime clause in the contract should be valid.

A basic pay of $2,600 is consistent with the fact that Rama was issued with an S-Pass.

Rama is a truck driver. Mostly, he transports soil excavated from building sites to Singapore’s coast where reclamation works have a need for earth fill.

From the very first set of salary documents, things go awry, but because he worked only two days in November (29th and 30th), the problems do not emerge all that clearly from that month’s calculations. It is the December papers that really reveal the contours of the scam. Below is the time and salary calculation for December 2016.

You will notice the following: The basic salary is shown as $950, nothing at all like the $2,600 declared in the contract.

The overtime pay for December was $771.68. This being for 104 overtime hours, it works out to $$7.42 per hour. Once again, it is nothing at all like what is said in the contract ($18.75 per overtime hour). Alex taps some more on a calculator and looks a little puzzled. “It seems to be consistent with the lower basic salary of $950, but is slightly off,” he mumbles to himself.

I learn that overtime rate is calculated thus: 1.5 times of the basic hourly rate. And according to law, the basic hourly rate can be obtained by taking the basic monthly salary x 12 months, divided by 2,288 working hours in a whole year. So, $950 basic per month should produce an overtime rate of $7.47 per hour. The rate that was used in Rama’s December salary sheet was five cents less.

“Did boss actually pay you this amount?” I ask Rama, pointing to the grand total of $1,747.00 on the sheet.

“Yes,” says Rama, adding “pay cash.”

So far, while we have established that he was shortpaid relative to the employment contract, it does not indicate that there was a scam.

That’s where the “Salary Advice” comes in. He was made to sign each month a separate piece of paper in which an amount of $2,600 was neatly printed. It also says that payment was made into an OCBC Bank account.

“I don’t have bank account; I never open[ed] one,” says Rama, waving his hands.

Rama has similar documents for all his months of work. There is a calculation sheet showing a basic salary of $950 and an overtime rate of $7.42.  The total amounts from the calculation are collaborated by handwritten figures written on the front of cash envelopes. In parallel, there are “Salary Advice” for each month showing a salary of $2,600 banked into an unspecified OCBC account.

Alex explains: “These Salary Advice slips have been prepared in case MOM [Ministry of Manpower] enquires. They, together with the employment contract, are meant to ‘prove’ that the S-Pass level of salary was adhered to, thus justifying the lower levy rate.”

But in fact, Rama was paid much less than that.

Four months into the job, Rama had a falling out with his boss over the state of repair of the trucks. In January and February, the vehicles were frequently sent to the workshop and he was tasked to be present waiting for them to be fixed. The boss refused to count the waiting hours as working time.

“He say, not working time if my hands not on steering wheel,” recalls Rama, with a bitter edge to his voice. “But he ask me drive to workshop, wait there and drive lorry out when [repair] finished.”

Rama has since resigned from the company and lodged a salary claim with MOM.