Employers to pay up to $3k more for new maids from Indonesia

New ruling by Indonesian authorities to pass cost of placement fee to employers from Jan

Industry players feel the new rule may end up disadvantaging both employers and foreign domestic workers.
Industry players feel the new rule may end up disadvantaging both employers and foreign domestic workers. ST PHOTO: KELVIN CHNG

From next month, employers must pay a one-time placement fee that used to be borne by incoming foreign domestic workers (FDWs) from Indonesia.

Single mother Lynda Lee, who has relied on FDWs from Indonesia for the last 10 years, is resigned to looking elsewhere to replace her former helper.

This is because a new ruling by the Indonesian authorities - to pass the cost of an FDW's placement fee to the employer from next month - will add an extra cost of up to $3,000.

The one-time fee - to cover expenses such as transportation, accommodation and medical examinations incurred by new FDWs coming to Singapore - used to be clawed back from the maid by deducting her salary for months.

A Ministry of Manpower (MOM) spokesman told The New Paper it has received feedback from employment agencies here that the Indonesian authorities are enforcing a "zero placement fee policy" from Jan 1 next year. The ruling means employers must now pay this fee to enable new Indonesian FDWs to come to Singapore debt-free.

Like many employers, Ms Lee, who lives with her two young children and 84-year-old parents, is baulking at the extra expense.

The sales manager, 52, said she will consider other nationalities to replace the helper who had just left her employment.

She told TNP: "It already costs so much to hire a new maid. I have no choice but to look elsewhere."

Indonesian maid Rini Supriyati said that $340 was deducted from her salary for nine months to settle her debt when she began working here 11 years ago.

The 35-year-old said: "It was difficult as I had to support my husband and three-year-old son. This new rule will help new maids."

But industry players TNP spoke to feel the rule may end up disadvantaging both employers and FDWs.

President of the Association of Employment Agencies K. Jayaprema said employers may look at Myanmar and other source countries where the cost of recruiting FDWs may be cheaper.

She said the placement fee is $2,000 on average but can rise to $3,000, and takes about six months for an FDW to pay off.

Of the 252,000 FDWs in Singapore as at June, 127,000 are Indonesian. The minimum wage of an Indonesian FDW is $550 a month, and $570 and $450 for Filipino and Myanmar FDWs respectively.

Ms Jayaprema said: "What happens if the FDW decides to leave a month or two after the employer pays the fee? There is currently no recourse for this."

Financial burden

Mr Brian Tan, director of maid agency Nation Human Resources, said the Covid-19 pandemic has already been a financial burden on employers who must pay up to $1,700 for an incoming FDW's swab tests and quarantine at dedicated facilities.

He added: "We hope that MOM can consider speaking to the Indonesian government to help alleviate some of the burden on Singapore employers.

The MOM spokesman said: "Employment agencies are in discussion with their Indonesian recruiters on how they can meet the requirements.

"Employers who have urgent needs and are facing delays in bringing in FDWs from Indonesia can discuss their options with the employment agencies.

"MOM has, in the last few weeks, been approving a larger number of FDWs from various countries to enter Singapore."

In a radio interview, Centre for Domestic Employees chairman Yeo Guat Kwang expressed his concern about the unintended consequences this policy may have on employers.

"If an employer is paying a high price to hire an Indonesian FDW, there could be a perception among employers that the higher costs of hiring equate to a more qualified FDW. We are concerned that if the FDW fails to meet the expectations of the employer... due to cultural mismatch, perceived lack of relevant skills or communication issues, then it will lead to a breakdown in the employment relationship," he said.

"The FDW may end up being sent back to the agent or, worse, repatriated in the early stages of employment."

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A version of this article appeared in the print edition of The Straits Times on December 18, 2020, with the headline Employers to pay up to $3k more for new maids from Indonesia. Subscribe