Parliament: MOM to look into potential loophole that keeps S Pass basic pay low
Published on Aug 5, 2014 3:58 PM
SINGAPORE - The Manpower Ministry will look into a potential loophole that allows employers to depress the basic wages of skilled foreign workers, hence making them "cheaper" than Singaporean hires, said Manpower Minister Tan Chuan-Jin in Parliament on Tuesday.
He was responding to Mr Zainal Sapari (Pasir Ris-Punggol GRC), who had asked if last month's increase in S Pass qualifying salary from $2,000 to $2,200 could be met via allowances and not just basic salary. Mr Tan confirmed that this could be done via basic salary or fixed allowances, as long as it was a "fixed quantum that does not vary from month to month".
Given that this was allowed, Mr Zainal worried that employers could just increase their foreign workers' allowances but keep basic pay low. Low basic pay would mean a lower overtime rate and lower bonus payments, making these foreign workers relatively cheaper than local hires, he added. He called on the Government to plug this loophole.
Mr Tan said he was happy to look into the specifics of this situation. "I think this is something that we can take a look to see whether it's a loophole that is exploited on a consistent basis and we will explore that further."