Managing a diverse workforce involves complicated processes and strict policies, making it a daunting task for every HR professional.

The global pandemic has also heightened the risks of handling a cross-cultural environment. Over the course of the COVID-19 crisis, there has been a series of cases involving illegal labor practices, workplace discrimination, and more.

In September 2021, The Straits Times reported a case about illegal labor importation. Companies would apply for work passes for foreigners through false declarations and collect kickbacks from them. These foreigners would then enter and remain in Singapore via illegally obtained work passes.

The Ministry of Manpower (MOM) stated, "Such syndicates recruit Singapore citizens and permanent residents to receive Central Provident Fund contributions as "phantom local workers" to illegally inflate the companies' quota to hire foreigners."

As a HR professional, it's important to be aware of and updated with the laws and regulations surrounding foreign employment practices. This is to prevent any legal complications that may lead to serious financial damages.

Everything You Should Know About Employment of Foreign Manpower Act

The Employment of Foreign Manpower Act (EFMA) governs the obligations concerning the work passes of employees. These include applications, cancellations, medical insurance, levy, and repatriation.

The EFMA covers any person issued a work pass by the Ministry of Manpower. Work passes include Employment Pass, S Pass, and Work Permits.

To help you in managing a diverse workforce, especially during the COVID-19 pandemic, let us take you through the key responsibilities HR should know when hiring foreign workers:

Foreign employees who are covered by the Employment Act are entitled to salary, hours of work, overtime and rest days, public holidays, annual leave, and sick leave.

All companies are encouraged to have a written employment contract that covers these areas.

If the company has specific requirements or policies regarding employment, you may also see the policies on individual work passes.

For foreign domestic workers (FDWs), their entitlements are provided under the EFMA. FDWs are not covered by the Employment Act. For guidelines on the well-being of FDWs, read the rest days and well-being for FDWs.

Penalties

Any violations in Singapore's labour laws can lead to government fines, licence revocations, and other disciplinary actions. The penalties for common offences in accordance with the EFMA are: [3]

Companies that employ a foreign employee without a valid work pass would face a fine between $5,000 and $30,000, or imprisonment for up to 1 year, or both.

For subsequent convictions, offenders face mandatory imprisonment and a fine between $10,000 and $30,000.

Contravening any condition of a work pass can lead to a fine of up to $10,000, or imprisonment for up to 1 year, or both.

Making a false statement or providing false information in any application or renewal of a work pass can result in a fine of up to $20,000, or imprisonment for up to 2 years, or both.

Receiving money in connection with an employment of a foreign employee may cost a fine of up to $30,000, or imprisonment for up to 2 years, or both.

Obtaining a work pass for a foreign employee for a business that does not exist, or is not in operation or does not require the employment of the foreign employee will lead to an imprisonment term of 6 months and a fine not exceeding $6,000. Offenders may also receive caning.

MOM has also added new presumption clauses and enhanced investigatory powers to step up enforcement against syndicated and errant employers.

Employers illegally recovering employment costs from foreign workers (levy, security bond, etc.) can be charged with a fine of up to $20,000 administrative financial penalty per infringement.

Employers inflating foreign worker quota by paying CPF to local ‘phantom’ workers may face a fine of up to $20,000 administrative financial penalty per infringement.

Employers who fail to submit a request for re-assessment for work pass eligibility before reducing the salary of S- and Employment Pass holders can incur a fine of up to $10,000 administrative financial penalty per infringement.

Streamline Your Foreign Employment Management

To help businesses avoid legal conflicts and consequences, QuickHR, a fully integrated cloud-based Human Resource Management System (HRMS), allows auto-inclusion and full-regulatory MOM compliance, letting HR professionals experience automated, simplified, and streamlined HR processes in adherence to government compliances.

QuickHR takes into account local laws including foreign employment practices, especially with a global workforce that comes with different regulatory compliances.

Our all-inclusive software can also assist you in reviewing legal procedures in areas of recruitment, onboarding/offboarding, career progression, internal transfers, and more.

To successfully run a new business or maintain long-term business growth, QuickHR can help you be informed and up-to-date with all the labour laws and apply them to every HR process.

QuickHR allows automatic calculations and deductions in adherence to governmental rules. These include tailored CPF formulations, auto-calculated SDL contributions, Bank GIRO and CPF submission features, and MOM itemised payslips.

Being an IRAS approved software solution, QuickHR guarantees smooth monthly submission with direct Auto-Inclusion Scheme (AIS) linkage of payroll information captured on the system.

The Infocomm Media Development Authority (IMDA) has evaluated QuickHR as an effective, market-tested, and cost-effective pre-approved solution for government grants offered to SMEs - meaning that you can save up to 80% off QuickHR.

With QuickHR, businesses will be able to prevent fines and penalties which may lead to great financial loss.

If you want to know more about QuickHR, you may contact us or request a free trial with absolutely no terms and conditions!

Protecting Foreign Employees’ Rights and Welfare in Singapore