From March 1, there will be a cap on the amount that Indonesian domestic workers need to pay recruiters and agencies to work in Singapore.

It is set at no more than $2,700 for a two-year contract, the Indonesian Embassy said in a circular sent to Singapore agencies and recruiters in Indonesia on Tuesday. The cap will be $2,550 for Indonesian domestic helpers from Java.

Its move comes after similar guidelines were announced last week for Filipino domestic workers, who should borrow only up to $1,100 to cover the costs in their home country before coming here.

The Indonesian letter to agencies also reminded them of the minimum monthly salary of $550 before payments in lieu of days off.

A spokesman for the Indonesian Embassy told The Straits Times yesterday that there are still workers being overcharged and receiving less than minimum wage.

She said the embassy is able to check employment terms and payment details when domestic workers renew their contracts or register for a compulsory identity card.

"If we see any agencies still giving high deductions or low pay, we will contact them to remind them. If they don't comply, we will impose a freeze on processing their paperwork," the spokesman said.

Besides agency fees here, the payment caps also include the fees for recruiters and expenses in Indonesia,which come to about $1,500 and $1,350 for workers from outside and within Java respectively.

There are an estimated 120,000 Indonesian domestic workers here.

Agents said recruiters in Indonesia will have to reduce the amount they charge, to meet the cap.

Although the cost structure was previously stated by the Indonesian authorities, some domestic workers have been paying sums of more than $3,000, said Association of Employment Agencies (Singapore) president K. Jayaprema.

She added that the embassy's latest message provides more clarity for all agents on how much they should be collecting from workers and employers.

"It levels the playing field for agencies, and hopefully employers will also be more aware of the rules," she said.

Humanitarian Organisation for Migration Economics acting executive director Jolovan Wham said that the fees are still too high and there should be greater transparency on the cost breakdown.

He added: "Excessive fees leave domestic workers demoralised as they spend months with little or no payment, and may already find it tough to cope with the stress of live-in domestic work."