Kay Lim Construction and Trading was fined $156,000 on Thursday for housing 60 foreign workers in dirty, rat-infested living quarters.
The firm has also been banned from employing foreign workers.
The workers, employed by Kay Lim and nine other firms, were found living in temporary quarters at a construction site near Commonwealth Avenue and Ghim Moh Link.
The Ministry of Manpower (MOM), in a statement yesterday, said: "The living conditions were very poor and there was evidence of rat infestation."
Ms Jeanette Har, director of foreign manpower management (well-being) at MOM, said: "All employers of foreign workers on work permits must provide clean and safe accommodation for their workers. Although we have seen improvements in the foreign worker housing landscape, there still are employers who deliberately compromise workers' safety and well-being.
"This is unacceptable and MOM will take these employers to task."
Under the Employment of Foreign Manpower (Work Passes) rules, employers must ensure that foreign workers are given accommodation that complies with MOM rules.
The ministry added that employers who flout conditions of the work pass can be charged under the Employment of Foreign Manpower Act, and fined up to $10,000 and/or imprisoned for up to 12 months on each charge if found guilty.
They can also be banned from employing new foreign workers or fail to get work pass renewals for existing workers.
Employers are also required to update MOM within five days if there is a change in the worker's address.
Kay Lim was last month found guilty of failing to update the addresses of 20 workers who had moved to temporary quarters at a construction site in Ang Mo Kio Street 44.
MOM said foreign workers on work permits who have issues with their housing must alert their employers.
If the employer does not make improvements, workers should seek advice and assistance from the Migrant Workers' Centre on 6536-2692 or report the matter to MOM on 6438-5122.