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New rule protects both employer and FDW

  1. We thank the many writers, such as Tay Yong Hung (“MOM needs to provide details on issue of safekeeping maid’s salary”; 14 Nov) and Paul Chan (“Law to stop safekeeping of maids’ money is needed”; 17 Oct) for their views on disallowing employers of foreign domestic workers (FDWs) to safekeep their money.
  2. Currently, our laws require employers to pay salary in full and on time. The Ministry of Manpower (MOM) recognises that employers who safekeep the money of their FDWs do so with good intentions and with their consent. Employers may also worry that their FDWs do not have good money management habits, and may eventually turn to moneylenders.
  3. Unfortunately, there are unforeseen circumstances. For example, employers have themselves faced financial difficulties and could not return the safe-kept monies to their FDWs. In other cases, employers and their FDWs could not agree on the amount safe-kept due to poor record keeping, causing distress to both parties. When such incidents happen, the FDW is usually left to bear the brunt.
  4. On balance, it is better for FDWs to safekeep their own salary, like all other employees.  FDWs who have direct access to their money can better plan their finances reducing the need for them to borrow money.  We encourage employers to maintain open communications with their FDWs on their financial needs. Through the FDW Settling-In-Programme, MOM also educates FDWs on money management and the risks of borrowing.
  5. The new rule also protects both employers and FDWs from potential salary disputes. It does not prevent employers from paying their FDWs in cash as long as employers maintain proper salary payment records. Alternatively, employers can help their FDWs open a bank account and pay the salary electronically.
  6. The Centre for Domestic Employees (CDE) has partnered POSB on a payroll account for FDWs which does not require an initial deposit nor charge a fall-below fee. If they prefer, FDWs can alternatively set up a bank account with any other bank. We encourage employers to check whether the bank charges a fee if a monthly minimal balance is not maintained. MOM will continue to reach out to employers to help them understand the new rule before it comes into force on 1 January 2019.