On 8 April 2020, TWC2 released a media statement touching on multiple concerns we had with the fast-evolving Covid-19 situation. At the time, three migrant worker dormitories had been placed under quarantine, impacting about 24,000 workers. Paragraph 2.7 of our statement said:

2.7 A minority of employers pay salaries in cash. Quite often, they pay the previous month’s wages around the 7th day of the following month. Since the dorms were locked down a little before the 7th of April, we are concerned that some workers have not received their March salaries. Their employers, not having set up giro payment arrangements earlier, will need help to get salaries to the workers stuck in the dorms.

Three days later, on 11 April 2020, the Ministry of Manpower (MOM) issued an Advisory on salary payment to foreign workers residing in dormitories.

It reminded employers that they

must pay salaries within 7 days after the end of the salary period. Failure to do so would constitute an offence.

The key paragraph is this:

To ensure that foreign workers receive their salaries during the Circuit Breaker, all employers with workers residing in dormitories are now required to pay salaries electronically, i.e. through General Interbank Recurring Order (GIRO) or direct bank transfer.

However, the Advisory also notes that only about 70% of foreign workers have bank accounts, opened as part of the work pass application process (additional workers may have opened bank accounts some time later), which suggests that 20 – 30% of workers normally receive their wages in cash. MOM’s Advisory also said that about 24% of employers are not paying salaries electronically, but now, they are …

required under the Employment of Foreign Manpower Act to shift to electronic payments for salary payments that are due.

For those workers without bank accounts, MOM wants employers to “immediately” apply for POSB bank accounts on their employees’ behalf via an online window at MOM’s website. The Advisory outlines what can then be expected to happen:

  • Employers will be informed of their approved applications within 2 working days, and the workers’ ATM card and PIN mailer will be mailed to company’s address within 7 working days.
  • Thereafter, employers should schedule an appointment with the dormitory operators to give workers their ATM cards and PIN mailer.

Naturally, salaries should be creditted into these newly-opened accounts promptly.

Crash and crush

By this time, there are seven dormitories under lock-down; they house maybe 70,000 workers. In any case, the Advisory applies to all foreign workers residing in dormitories, quarantined or not. We know that there are about 200,000 workers in the 43 purpose-built dormitories, but we estimate there may be tens of thousands more in factory-converted dormitories. The grand total may be about 250,000 to 300,000 foreign workers.

If 30% of them do not yet have bank accounts, then, over the next few days, MOM’s online window and POSB Bank will see a rush by employers trying to open bank accounts for perhaps 60,000 to 75,000 migrant workers. Some computer somewhere is probably going to crash.

The intent of the Advisory is good, but we wonder whether MOM has also thought through the operational implications.

Another issue to consider is this: Workers will want to check their bank accounts to ensure that they have received their wages. In normal times, we see them at shopping malls or suburban town centres queuing at automated bank teller machines (ATMs), but now with travel restrictions, many will only be able to access the ATMs located within their dormitories.

A quick search at POSB Bank’s website did not reveal any list of ATMs at their dormitories, so we do not know how many have been installed, particularly in the huge dormitories such as Sungei Tengah Lodge (25,000 residents) or the S11 at Punggol (13,000 residents). However, our casual observation from occasional site visits is that there may be just one or two ATMS in each dorm.

An automated teller machine at Westlite Mandai dormitory – file photo

Besides having thousands of workers converging on a few ATMs, 60,000 – 75,000 of them may be attempting to use an ATM for the first time — they being the workers with newly-opened accounts. Unfamiliar with the machines, they will take much longer than others just doing an account balance enquiry.

Long queues and short tempers should be anticipated and planned for.

Imagine a scenario in a quarantined dorm, where workers are only given, say, two hours each day to come down to the common areas from their rooms. A worker may have queued at an ATM for most of the two hours without reaching the head of the queue only to be told that his two hours are up and he must go back to his room. Heated words, or more, can result.

It is curious why the Advisory specifically limits itself to foreign workers staying in dormitories. Why not all non-domestic foreign workers, for example? The problem with limiting itself to dormitories is that it can create confusion. Even as we write, workers are being moved out of dormitories into army barracks, carparks and even floating hotels. It’s expected to be an ongoing process with the aim of lowering density in dormitories as we had urged. But then when workers are moved to such temporary accommodation, will they still be within the ambit of the Advisory?

The Advisory from MOM is silent on another statutory requirement: the provision of detailed itemised payslips to workers. Presumably these can be sent through their phones, so there is no insurmountable technical difficulty, but it would have been good if the Advisory also reminded employers of this obligation.

Perhaps anticipating that it may ultimately prove impossible for so many employers to open bank accounts for tens of thousands of workers in mere days, MOM’s Advisory has a paragraph saying…

For employers who are unable to set up electronic payments due to exceptional circumstances, they must schedule an appointment immediately with the dormitory operators to make payment in cash for all outstanding salaries.

Picture this: The payroll clerk will be asked to wear a mask, enter a quarantined dorm and dispense cash — with all the risks of contagion quarantine was supposed to prevent in the first place. But this may be unavoidable, given the above difficulties with opening accounts and setting up Giro systems for so many workers and companies. Best that early preparations are made in dorms to have secure booths, perhaps with glass windows, where wages can be given out.

But picture this too: Workers moved out to carpark dorms with only beds, but no lockers, and nowhere to store securely their (small) wads of cash. We have seen photos and videos on social media were all they have are beds. In normal times, these workers might have gone straight to the hundi (unlicensed remittance agent) to remit money home, so storing cash wouldn’t have been an issue, but now they cannot leave their dorms. Early action needs to be taken to give them lockers.

Next headache: sending money home

For nearly all workers, one of their top priorities would be to remit money home — the lockdown in their respective countries means their families need money even more urgently now.

In earlier press reports (see here and here), it was stated that  remittance services will be provided onsite at the quarantined dorms. We have since heard from sort-of-inside sources that POSB Bank is unlikely to be able to do so. Instead, it has provided self-help guides to do this via an app from DBS Bank/POSB Bank.

We just took a look at the app, and frankly, it looks very intimidating, especially to someone whose native language is not English. See here and here. The latter is a PDF page.

One option requires workers to have access to an AXS machine — but our quick research reveals that, among the 43 purpose-built dorms, these are only available at five.

For option 2, they first have to fill up the required details, click submit, launch their Gmail app — many workers don’t use email — and wait for a call from POSB for validation. Wait further for an SMS. And wait two weeks for processing! And all this requires them to have a mobile line that is able to send/receive SMSes or have data in the first place!

It is hardly any wonder that migrant workers often use the informal hawala system (also known as the hundi system). See an article by our intern: Remittance highways and byways, from September 2019. But if they cannot leave their dorms, this avenue is now closed.

Caught flat-footed

We have no doubt that public servants at MOM are working feverishly to solve problems as they arise e.g. when TWC2 issues a media statement pointing certain things out, and in the middle of a crisis, there will always be a somewhat jerrybuilt quality to the solutions hastily announced. Even so, there still seems a lack of forethought as to how newly announced rules can be operationalised, and a degree of ignorance about realities on the ground e.g. how many ATMs are there?

The bigger lesson from this is that policy-wise, Singapore has been far too complacent. TWC2 has urged for over a decade to make electronic payment of salary mandatory. We wouldn’t be in this mess, having to open accounts for maybe 60,000 to 75,000 persons within a few days, if our proposals had not been dismissed through the years.

For a city so keen to wear the Fintech label, we’re also shockingly behind when it comes to mobile money, such as M-Pesa. Not being in the financial sector, TWC2 does not fully understand why Singapore hasn’t moved on this front, but we’ve heard, anecdotally, that the financial regulatory authorities are overly conservative and protective of the status quo (think: existing banks). Such second-hand reports may be true or may not, but one is left with the sense that because such innovations are targetted at lower-income and marginalised communities shifting small sums of money (going by the experience of Africa and India), it’s not a priority for us, a global banking centre. If that was the thinking, it would be completely in character for Singapore, where the needs and interests of foreign workers are often overlooked.

Let’s hope that attitude changes now.