File photo: workers can get a brief consultation at TWC2’s meal station. For more in-depth assistance, they are asked to go to our main office where our caseworkers are based.

By Melanie, based on an interview in September 2019:

A big shock hits construction worker Mano (not his real name) when he visits TWC2 to discuss an issue that has been worrying him.

The Indian national has worked in Singapore since 2009, but in June this year his employment suddenly came to an end after an accident at work. He is currently on medical leave and has engaged a lawyer to pursue compensation for the injury he sustained.

Today, however, Mano is looking for advice on another issue.  He explains to TWC2 that for the past few years that he has been with his current employer, $80 ‘tax’ has been deducted monthly from his salary. Once a year the accumulated amount (12 x $80) is paid back to him as a lump sum labelled “Refund tax monies”. The most recent refund was in January 2019 for the $960 that was deducted in 2017.

Mano explains that his employer has continued to deduct the $80 ‘tax’ from his monthly wages through 2018 and 2019, and it’s being deducted even from the medical leave wages he is currently receiving. Mano asks TWC2 how he can go about recovering all that he is owed.

As explained to me by a senior volunteer, Singapore’s Employment Act lists permissible deductions. Anything not listed is not allowed. “Tax” is not among the permissible deductions.

However, in Mano’s case, the $80 isn’t exactly a deduction, adds the volunteer. It is a withheld sum that is eventually refundable if there is no tax payable.

So is that allowed?

It’s not altogether clear though it does not look like it is. Employers are permitted to withhold an employee’s final salary until tax clearance is received. If any taxes are to be paid, the excess balance of the final salary must be returned to the employee before repatriation. As for monthly caching, such as in Mano’s case, there is probably no explicit guidance and thus is likely impermissible.

We tell Mano that to reclaim the backdated tax ‘deductions’ he will need to go to the Ministry of Manpower (MOM) to get clearer advice. If it is judged impermissible, MOM is also where he can formally lodge a claim for refunds. Alternatively, he can visit TWC2’s office and consult with a caseworker who can help him communicate with MOM.

We also had some bad news for him.  If MOM treats this as an illegal deduction, then the “12-month rule” will likely apply. Under this rule, he will be able to claim only for the previous 12 months of deductions. Mano’s face drops when he hears that. He is owed $80 per month since January 2018, and it is already September 2019. This means the furthest back he can claim is September 2018 and he is likely to lose eight months’ worth of refunds (January to August 2018).

Mano’s lack of knowledge of the system and his rights sadly means that he may have to write off the loss.

This example of bad practice is just one of the ways migrant workers can be taken advantage of by employers in Singapore and something that TWC2 is fighting hard to overcome.  We advise Mano to visit MOM and file his claim without delay to recover as much money as possible, and hope his experience will encourage others in a similar situation to do so too.