The mess over rest day pay starts from the top

Member of Parliament He Ting Ru (Workers’ Party) asked the Minister for Manpower a question about rest day pay in the sitting of 9 May 2023. Her full question and Minister Tan See Leng’s reply is quoted below.

MP: Ms He Ting Ru

To ask the Minister for Manpower (a) whether the Ministry tracks the number of work permit holders who are asked to work on rest days and are paid a (i) double and (ii) single rate of pay respectively; (b) in each of the last three years, how many complaints has the Ministry received about workers being paid a single rate of pay contrary to the requirements of the Employment Act 1968; and (c) how many of such complaints have resulted in enforcement or punitive action.

Answer:

1. Under Part 4 of the Employment Act, employers must provide one rest day per week and compensate workers who work on their rest days. Rate of pay for work on rest day is one day’s basic salary if the request is made by the worker and two days’ basic salary if the request is made by the employer. The Ministry of Manpower (MOM) does not track the number and type of such arrangements.

2. Between 2020 and 2022, the Tripartite Alliance for Dispute Management (TADM) handled about 535 claims from work permit holders each year regarding non-payment or short payment of salaries for work done on rest days. 95% were resolved through mediation while the rest were referred to the Employment Claims Tribunals.

3. MOM also investigated complaints on rest day pay, including referrals from TADM, for an average of 68 work permit holders each year. As a majority of these employers failed to pay due to administrative oversight, wrong calculations or financial difficulties, MOM took an educational approach towards these employers to increase awareness of their employment obligations and to help them rectify their employment practices. Sterner enforcement actions were taken against employers of about 7% of the affected workers, where severe breaches of the Employment Act were detected.

In Singapore, low-wage workers are entitled to one rest day per week. The Employment Act requires employers to pay double the basic rate of pay if they request employees to work on their days off, but employers need only pay the single pay rate if a worker requests to work. Our previous articles (see this and this) explained how this is a legal loophole that needs revising. It is an outdated rule that exists only in Singapore among 16 developed countries we compared with, and it makes low-wage workers vulnerable to an employer’s manipulation of worker consent.

From the minister’s reply,  we note three points:

Firstly, on average, MOM investigated 68 cases yearly of non/short payment of rest day salary, of which employers of “7% of the affected workers”, i.e. 5 cases resulted in “sterner action”. The type of “sterner action” was not explained. For the rest (63 cases), the Ministry of Manpower (MOM) took an “educational approach”.

Secondly, MOM gives the main causes for non/short payment as administrative oversight, wrong calculations and financial difficulties.

Thirdly, according to MOM, between 2020 and 2022, there were about 535 salary complaints each year regarding rest day salaries. 95% were resolved through mediation.

Neither credible nor confidence-inspiring

The general sense one gets from this parliamentary reply is that there is more minimising the problem than facing it squarely. The reasons it gave for abuse of rest-day pay are not credible, and the ministry’s soft response was far from confidence-inspiring.

The low number of investigations resulting in “sterner enforcement action” (an average of seven percent of 68 cases investigated per year, or merely five cases) reveals MOM’s reluctance in enforcing the rules on non/short payment of rest day salary despite the large number of workers who might have been short-paid but made no complaint.

It should also be noted that whilst MOM/TADM handled an average of 535 salary complaints a year regarding rest day pay, the ministry only investigated 68 cases, or 13 percent. The number of investigations is a fraction of the number of complaints filed.

In turn, TADM’s 535 complaints a year is, in our opinion, almost surely a tiny fraction of the real number of occurrences in the real world. From a survey of 1,563 Work Permit holders that we conducted in April 2023, 18% of them said their employer short-paid rest day salary (see our report). In contrast, TADM’s 535 salary complaints from Work Permit holders each year regarding rest day pay is only 0.05% of Work Permit holders in Singapore.

Why is TADM/MOM’s figure so low? Because our foreign worker system disadvantages the worker, thus inhibiting complaints, as we shall explain further below.

Minimising the issue

Two details from the minister’s reply cry out for further comment. After admitting that only employers of seven percent of affected workers received “sterner enforcement action”, the rest of the cases were explained away as “due to administrative oversight, wrong calculations or financial difficulties“.

Imagine if another minister were to excuse away lack of action over burglary because burglars were breaking and entering into homes for reasons of mistaken addresses or financial difficulties and do not warrant penalties. If we think the latter (hypothetical reply about burglary) deserves derisive laughter, then it is hard to take the former seriously. After all, not paying employees according to law is also theft – theft of wages that rightfully belong to workers.

The minister added that his ministry took an “educational approach” instead. TWC2 would argue that this completely misses the mark. From our long experience with cases, employers know the law full well; they don’t need to be “educated”. They know how to apply overtime rates of pay, they know about notice periods, they know about withholding taxes. In several cases that we have seen, they also know well enough to make employees sign “request to work on my rest day” forms to provide deniability should workers later complain to the authorities.

TWC2 has seen cases where it was the employer who asked his workers to work on a rest day and yet made workers sign a sheet saying that they “requested” to work. TWC2 is disappointed in the way TADM/MOM accepts such documents at face value without taking into account the psychological coercion behind workers’ signatures.

The second detail is this: “Sterner enforcement actions were taken against employers … where severe breaches of the Employment Act were detected.” In other words, the ministry’s policy is that violation of this particular Employment Act provision is not punished unless other provisions of the law are also severely violated.

Why the problem is under-reported

For a worker to file a salary claim of non/short payment of rest day wages, the risk far outweighs the benefit. That is because the amount claimable for short payment of rest day pay is usually a relatively small sum. For example, we recently assisted three workers file such claims. The amounts were $54, $162 and $379 for claim periods between two and seven months. When combined with the difficulty of getting another job after the claim is filed, the worker would lose more than he would gain even if the claim were successful.

There are several reasons workers are hesitant to file complaints:

• Threats of retaliation from the errant employer;
• Huge fees demanded by illegal agents for securing a new job; or
• More moderate, but still substantial fees required by legal agents for new jobs (two months’ salary for a two-year contract).

The asymmetry of power between employers and migrant workers makes any so-called consent doubtful. This wouldn’t be a problem (in this specific area) if the law mandated a uniform rate of pay for working on a rest day, but currently, employers can exploit our law to exploit workers.

If the worker wishes to look for another job – perhaps he wants to extricate himself from the unfair treatment over rest day pay but does not wish to make too big an issue of it by filing a formal complaint – he would need the consent of the current employer, something employers rarely give. These factors hinder workers’ ability to escape coercion and resist unfair demands. Thus, MOM’s assumption – ‘No complaint = no problem’ – overlooks the above factors limiting the worker’s freedom. In our experience, these limitations faced by the worker also render him vulnerable to exploitation where short payment is the employer’s deliberate practice.

MOM should not mislead itself by its own low numbers to think that is this an unimportant issue. Their numbers do not reflect the true scale of the problem.

The only solution to avoid the short-payment of rest day salaries is to revise Section 37 of the Employment Act to enshrine a double rate regardless of who requested the work. This would be in line with legislation in other developed countries and remove the possibility of a “request to work” on a rest day being coerced from a vulnerable worker. Removing the request element would simplify the rule and prevent “administrative oversight” and ‘“wrong calculations” for all workers.

The rest day salary rate may be a small portion of the salary complaints, but once employers get the message that they can violate this with impunity or receive no more than a bit of “education”, they feel emboldened to violate other employment laws as well. However, in the case of the rest day issue, the complication is that our present two-pronged provision creates a lot of ambiguity and opportunity for “gaming” the system, making enforcement even harder than it needs to be. Therefore, clarifying this issue by realigning the provision to a simple double rate of pay for working on a rest day is a necessary step towards providing a greater sense of fairness in the computation of wages and the claims process.