A boss was apologetic that he was unable to pay his employees their salaries on time. But what is interesting is the reason why he couldn’t do so: he had to pay foreign worker levies to the Ministry of Manpower (MOM) first.

Below are key portions of a transcript of a meeting between the boss (who shall remain unnamed) and a group of 19 employees. The workers had been complaining about three months’ salary short-payment. The context is that the company was having a cashflow problem, though it was not entirely without money. As can be inferred from the spoken words, project payments were slow or delayed.

We will keep the company and the workers anonymous since the point of this article is not about this particular case, but to illustrate the priorities imposed by MOM on company cashflow. In the extract below, words in square brackets and italics, e.g. [square brackets], have been inserted by TWC2 to help make things clearer to readers.

Around the fifth minute of the recording and after a quick headcount to ensure that all 19 workers had come into the room, the boss began.

Boss: Okay, I say sorry to all of you. I promised you before the date 20th you all get pay. Okay. But this month got some problem screw up. I only collected the cheque on 21st.

Actually the money is to pay all your salary. We owe the government the levy. We [unclear] the government, I try to talk to the government ask him can we pay instalment because you know that time the Kranji [project] the money never come in. We owe the levy. But the government say no. Force us, levy have to pay.

We even go and talk to the MP [Member of Parliament], ask the MP write in letter for us, okay, but the MP also cannot do anything. So in order not to screw up anything, we got no choice we go and pay the levy. 32 thousand. So that’s why all the money screw up, and the salary hold up. Okay it’s our fault, it’s my fault it delay because I promised you, [yet] I never give you. I say sorry to all you first.

As you can see, he was telling his workers that there had been money in hand to pay their salaries for the month. He tried to negotiate with MOM about instalment payments for the foreign worker levy — for which he said he owed $32,000 — but was unsuccessful in getting MOM’s agreement. As a result, he had to tell his workers they would not be getting their promised salaries.

About three minutes later in the transcript, after he explained what he was doing to get another $28,000 paid by his clients or contractors higher up in the food chain, the boss says it again.

Boss: This is the reason why the pay screw up. By right, [everything should be] okay, by right,  if MOM allow me to pay instalment, Monday afternoon yesterday I can pay you all salary already. But because of this, the whole thing screw up.

Readers might wonder why the boss wasn’t considering defying MOM and paying the workers first. In TWC2’s experience of such situations, there would be a very high risk that MOM would revoke all the workers’ Work Permits. The workers would then be out of a job, and be issued with Special Passes. One of the conditions of a Special Pass is that the individual (foreign worker) would be forbidden from seeking further employment. The men would remain jobless while MOM and the employer fight it out over the levies. It’s not difficult to characterise such action by the regulator as one of punishing the innocent.

Eventually, the men would be sent home and they would have to pay agents thousands of dollars all over again to secure new jobs.

The boss would not want their Work Permits revoked either. If he loses his workforce, how is he going to complete the projects he has undertaken? If he doesn’t complete them, how will company be paid by clients? Hence, the implied threat to revoke Work Permits compels the boss to pay MOM all levy arrears first even if the workers have to go without their salaries and continue working for free.

Three minutes later, the boss hints at these consequences if he did not pay the levy immediately as demanded.

Boss: At the end of the day, I still have to cancel all of your permit send you all back. I [unclear from recording] your family I send you all back. Then you have to come back again. No point right? At the end of the day, who win? You lose, I lose. Both die.

The boss continues to plead for his employees’ understanding.

Boss: It’s not i don’t want to pay you all. Actually the money did come in for you all, okay? Salary is to pay you all, but then because of the stupid MOM — I went down to see them, I even call and write to them, I even ask MP write letter to them — they say no. I’m stuck.

Workers in need of money to live on

A bit later, we find the boss providing more details of the money dilemma, alluding to several months of unpaid foreign worker levies.

Boss: MOM there: 32 thousand. Big sum of money. All your salary only how much? 22k including the Chinese one. Twenty two thousand I would pay you all already. But that side take me 32 thousand. So I’m stuck. 22 thousand and plus the levy [for the current month?] 27 thousand just nice. If they let me pay one month [of levy], no problem but no, they say all must pay full. So I’m stuck. you understand? Okay, this is the reason what happen. Okay this is the reason what happen this month.

At about the thirteenth minute of the recording, the boss explains his earnestness about the issue and we start to hear the workers.

Boss: Our salary [policy] is pay to all of the ..  er..  4th or 7th of each month. That should be the way, okay? That is the correct way and healthy way, I tell you. I also like to do it this way, but unfortunately the market now, ah, all delay. That’s why, the cashflow we got problem. That’s why end up like that. What I can tell you all is that from next month onwards, from 18th latest you will get pay, okay? If everything go back to…  okay, the money all come in, we will stick back to 7th. I’m sure if we stick to 7th, every one will be happy already, correct or not?

Workers collectively: Yes

Boss: But at the moment, I look at it, is that comfortably, is that 18th we can pay you. Every month. Latest by 18th, okay? Can you all accept? But if you all cannot accept, I also cannot force you because it’s my fault, okay it’s my fault.

A worker: Okay, uh, but boss, uh, you next month money now can pay?

Boss: Now that’s what I say, I’m seeing this few days for the money to come in from this Kranji [project]. I ask them not to pay full [perhaps he meant: even if they cannot pay in full], give me certain sum first. Maybe fifteen, eighteen thousand. So that I can pay all of you first.

Workers: [mumbling]

Boss: Okay, because if I ask him [Kranji project client?] to pay all, he may not be able to pay me all. He will, ah, because he is too big a figure, he will drag. I know, you got problem. Pay me fifteen to eighteen thousand, at least I can pay your salary first, okay?

Worker: No money, now all man also cannot…. [mumbling]

From the workers’ perspective, they’re broke. It’s all very well to be receiving promises of good intentions and to hear of future plans, but they need money to live. Now.

Worker: This week pay can or not, boss?

Boss: I cannot tell you this week can pay or cannot pay because they telling me these few days the cheque will come in. If, let’s say, they drag until Thursday afternoon then come… I tell you,  I bet Friday cannot make it already.

And that last sentence suggests that everything remained very uncertain. The only thing certain was that whatever limited cash the company had in hand had to be diverted to MOM.