Both workers were employed by a restaurant and catering business along Jalan Bukit Merah. The shop unit has since changed hands and the signboard taken down.

Hla Aye and Oo Myint (names changed) are two young Burmese workers with university degrees. They came to Singapore with a promised monthly salary of $3,500 and were sent to work in a vegetarian restaurant. This salary was abundantly clear in their S-Pass documentation. From their very first month, their employer began deducting nearly half their wages, calling it a “loan repayment”, despite them never taking such loans.

Imaged below is an example of Hla Aye’s payslip. It is from January 2025, and it clearly shows a deduction of $1,550 from her base salary of $3,500.

How we know the “loan repayment” is fictitious

One might think that if the two workers said they did not take loans from the employer, it’s just their word against the employer’s, but in fact there is evidence contained within the payslip itself that the so-called loan repayment was fictitious. It takes a sharp eye to spot it, and it goes like this:

  • The payslip also shows an overtime (OT) component paid at the rate of $14.96 per OT hour.
  • Using the formula provided in the Employment Act, we can compute backwards to arrive at the basic monthly salary that is consistent with an OT rate of $14.96.
  • Doing so, we arrive at a basic monthly salary of $1,900, which is far from the contracted salary of $3,500.
  • However, it is suspiciously close to the figure ($1,950) after the “loan repayment” of $1,550 has been netted off the basic salary ($3,500 minus $1,550 = $1, 950).

Since the employer seemed to be using the rate of $1,900 or $1,950 as the base for calculating overtime pay, it therefore goes to show that the primary purpose of the fictitious loan repayment was simply to lower the basic salary illegitimately.

Continued working

Although frustrated by the steep deductions, Hla Aye and Oo Myint continued working. The reduced wages were still higher than what they could earn back home. When they complained, the employer insisted that this arrangement was part of their unwritten contract, leaving them feeling powerless to challenge it.

Another reason they endured such exploitation for as long as they did was the ongoing crisis in their home country. “I don’t want to be sent back to Myanmar” is a sentence we hear from nearly every Burmese migrant worker we assist. The country remains in a state of emergency, with more and more townships being placed under martial law, leading to severe travel restrictions.

According to our many Burmese clients, once they return, they may not be allowed to leave again, depending on factors like their ethnicity and age, under the conscription law – which applies to both men and women. The broader political instability also makes the situation highly unpredictable, which fuels a deep fear of repatriation. In our view, this makes migrant workers from Myanmar more vulnerable to exploitation compared to other nationalities.

Tax shock

The breaking point came after working for more than two years, when Hla Aye discovered that their employer had incorrectly reported to the Inland Revenue Authority of Singapore (IRAS) around $7,000 as monthly income. This was more than three times the actual income they received and resulted in more than 30 times the income tax they would pay if their actual income had been declared.

Oo Myint also found that the employer declared an inflated income in his case. Their complaint to the employer fell on deaf ears, and the both of them resigned from the job and came to us for employment advice.

At our consultation, Hla Aye and Oo Myint were visibly stunned when we delivered them two shocking pieces of news: Firstly, the employer’s unilateral deductions were unlawful and that they were entitled to receive their full contracted salary of $3,500. Secondly, they were also substantially underpaid for overtime pay.

Our calculation indicated that, over the past 12 months, Hla Aye was underpaid by $31,000 and Oo Myint by $23,000.

There was more: since their resignation was triggered by the employer’s illegal conduct – failure to pay the correct salary and false declaration of income to the IRAS – it would be deemed an involuntary resignation. This not only gave rise to a wrongful dismissal claim, but it also added a new salary claim for notice pay, bringing their total claim amount for salary and wrongful dismissal claims to more than $50,000 and $30,000.

After dedicating years of service to the employer’s restaurant and catering business, the pair of them came to the painful realisation that they had been deceived and exploited all along. The substantial value of their potential claims points to the seriousness of the wrongdoing they endured.

Settlement

TWC2 assisted them in filing salary and wrongful dismissal claims at TADM (the unit in the Ministry of Manpower that mediates such claims). Fortunately, Hla Aye and Oo Myint were able to reach a settlement with the employer within five weeks, though the agreed sum was only a fraction of their original claim. They didn’t have the heart to push for a higher amount, knowing the employer’s business was struggling.

Shortly after, the IRAS responded to our request to investigate the employer’s incorrect income declarations. The two workers’ income tax assessments were adjusted, although the revised figures were still inaccurate, as they were based on the contractually agreed salary rather than their actual earnings plus settlement sum. Hla Aye and Oo Myint chose not to pursue the matter further, as the employer had agreed to cover their tax liabilities as part of the settlement.

In this case, TWC2 assisted in the following ways:

  • Advising on their employment rights
  • Calculating their outstanding salary
  • Gathering supporting documents, formatting them for submission
  • Providing continuing support, such as regular meetings to prepare for the mediations
  • Reporting the employer’s false declaration to the IRAS and MOM
  • Reporting the employer’s Employment Act violations to MOM

All in all, they were satisfied with this outcome, although the fact remains that the true winner here is the employer, who ended up paying far less than what was declared in the Ministry of Manpower work pass application. In a sense, they got away with paying S Pass holders with salaries that fell within the Work Permit scales. This was made possible by exploiting the workers’ humility and precarious position as migrant workers.

The question remains: what can Singapore do to ensure that such unlawful practices are not allowed to continue unchecked?

Before they left for Thailand, Hla Aye and Oo Myint insisted on treating us to dinner as a gesture of thanks. We politely declined but agreed to meet them for coffee the day before their departure. “We would never have recovered the money without TWC2’s help,” they said. In return, we thanked them for their courage and trust, for standing up and, in doing so, helping to pave the way for other migrant workers to claim the wages that are rightfully theirs.

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