Update on Possibility of Disallowing Downward Revisions from Salary Indicated in In-principle Approval Letter of Foreign Workers

Mr Louis Ng Kok Kwang asked the Minister for Manpower whether she can provide an update on the Ministry's consideration on the possibility of disallowing downward revisions from the salary indicated in the In-Principle Approval letter (IPA) of a foreign worker.

The Ministry has reviewed the possibility of disallowing employers from making downward salary revision entirely, and consulted relevant stakeholders, including Singapore National Employers Federation (SNEF), Association of Small & Medium Enterprises (ASME) and the Migrant Workers' Centre (MWC).

Through our consultations, tripartite partners recognise that there is a need to retain the flexibility to renegotiate employment terms, including making salary revisions to reflect the demonstrated performance of the worker. Disallowing downward revisions of salary entirely will leave the employer with no other option except to terminate the employment of a non-performing worker. Furthermore, tripartite partners have an understanding that in certain situations such as an economic downturn, businesses will reach an agreement with their workers on wage flexibility instead of retrenching the workers. Such approaches that cut costs to save jobs would no longer be possible if the Member's suggestion is adopted.

Given the feedback from tripartite partners, the Ministry has decided to retain the flexibility for employers to revise the salaries of their foreign workers. We will continue to focus on protecting the interests of foreign workers by strongly enforcing against employers who reduce their workers' salaries without their agreement. When there are disputes involving salary reduction, the onus is on the employers to declare and substantiate their reasons for the salary reduction. The Ministry of Manpower's (MOM) actions against errant employers include requiring them to make good any salary shortfall to the workers and imposing a fine of up to $10,000 per worker. In 2019, we imposed a total of $488,000 in administrative financial penalties on 68 employers. MOM also allows such workers to be transferred to a new employer.