Author Topic: New Employment Agency (EA) Regulatory Framework  (Read 1605 times)

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New Employment Agency (EA) Regulatory Framework
« on: June 18, 2012, 12:11:17 AM »
New Employment Agency (EA) Regulatory Framework

v) Fee caps

1. What are the new fee caps from 1 April 2011?

EAs can charge a worker a fee not exceeding one month of his salary, for each year of the duration of the approved Work Pass or employment contract, whichever is shorter, subject to a maximum of two months’ salary.

There will be no cap on fees that EAs can charge employers.

2. What component of a worker's salary does MOM base the fee cap on?

The fee cap is calculated based on the worker’s total salary. This would include the worker’s basic salary and all fixed allowances. It will not include bonuses and variable components such as overtime pay.

3. Are EAs allowed to charge foreign workers fees for renewals of work passes?

Under the Employment of Foreign Manpower Act, employers are responsible for bearing the costs of fees related to Work Permit or S Pass applications/renewals and not allowed to recover (directly or indirectly) from their foreign employees. Therefore, EAs should not charge workers to recover the cost of such fees. EAs that do so would be considered to be abetting an offence.

4. Are EAs allowed to charge workers fees for transfer to another employer?

EAs helping workers to find another employer should be allowed to charge fees for providing the service. These transfer fees that EAs charge should also comply with the fee cap.

5. How will foreign workers know the amount that they would be expected to pay the Singapore EA before they enter Singapore?

To ensure that foreign workers are made aware of important information before they arrive in Singapore, MOM has included details such as the basic monthly salary and allowances paid to the worker, and fees paid to the Singapore EA, in the in-principle approval (IPA) letter that MOM issues to foreign workers before their arrival in Singapore.

6. Why did MOM remove the cap on fees that EAs can charge employers?

Employers are unlikely to be exploited by EAs charging unreasonable fees as they have a stronger bargaining power compared to workers. On the other hand workers, especially foreign workers, usually face information asymmetry and have little control in choosing their Singapore EA or the EA fees that they are asked to pay.


Above was taken from this page in the MOM website. | Your smart guide to money matters and entrepreneurship.

New Employment Agency (EA) Regulatory Framework
« on: June 18, 2012, 12:11:17 AM »

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