2 Employers Found to Underpay Retail Employees by About $450 Per Month Per Person Even With PWM

By
Nadia Irdina
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It’s clear that many industries rely on foreign workers to beef up their workforce. Our foreign workers have diluted our workload, made it more efficient, and are often paid less than us locals (in some sectors only, of course).

However, in a statement by the Ministry of Manpower (MOM) on Thursday (6 June), they shared that two employers will no longer have the privilege of having foreign talents in their workforce.

This is because they were reported to have underpaid their employees since April 2023.

Here’s what happened.

Progressive Wage Model (PWM) 

To truly understand the severity of underpayment other than the very obvious reason (it’s unfair and everyone should ideally have the money to survive), we need to understand the PWM.

PWM is something that was developed by the tripartite committees (unions, employers and government) to help make sure that the lower-wage workers are being paid fairly.

This is how it works.

  1. Lower-wage workers in Singapore have higher starting salaries
  2. Their salaries will increase according to how far up they are on the skills ladder
  3. Employees get the opportunity to upskill and be more productive
  4. Employees are clearer about their career progression

For example, the PWM can help make sure that Singaporeans and PRs who work in waste collection can have an increase in monthly gross wages from $2,210 in 2023 to $3,260 in 2028.

In MOM’s statement on Thursday, MOM mentioned that the PWM today covers more than 155,000 lower-wage workers across nine sectors and jobs.

Whenever a new PWM is introduced, MOM gives employers six months to make the necessary adjustments and implement them for the employees.

What do you mean by “new PWM”?

MOM first introduced the PWM to the cleaning sector back in 2014. Gradually, MOM will expand the enforcement of the PWM, sector by sector.

Now, with relevance to this case, the PWM was introduced to the Retail sector in September of 2022 followed by the Food services sector in March 2023.

Employers Persistently Failed to Comply 

So, what happened?

From April 2023 to March 2024, MOM said that they conducted inspections on 4,100 Retail and Food Service firms, to make sure that these sectors are on track.

Through their inspections, MOM found that most employers are guai. 

Inevitably, some firms weren’t familiar with the PWM requirements and they weren’t compliant at first. But after MOM explained it to them, they made the necessary changes.

Now, it was found that two “errant employers remained non-compliant” after MOM tried reaching out to them many times.

Essentially, MOM was asking them to adjust their workers’ wages, but MOM was ignored.

Both of these naughty employers operate retail shops. Unfortunately, they have been underpaying a total of 12 retail workers.

These 12 retail workers were short of about $450 a month each since April 2023. In other words, they deserved more under the PWM but their employers weren’t cooperative.

These employers should know that going against the Thanos of working is not a good idea.

Because the employers were non-compliant, MOM decided to stop the employers from applying or renewing work passes for foreign workers until they solve the underpayment issue.

In other words, these employers won’t be allowed to recruit more foreign workers or make sure their current foreign employees get to stay in their workforce until these workers are paid fairly.

The Tripartite Will Always Support Employers and Employees

MOM said that they will continue to conduct regular checks to ensure the different sectors comply with their respective PWM.

They plan to do this through workplace inspections and audits whereby the employers need to submit employment documents for checks.

MOM added that they will continue to work with the other tripartite members (unions and employers), as well as public agencies to raise awareness and help the employers meet the PWM requirements and ensure their workers are paid fairly.

These public agencies include the Building and Construction Authority, the National Environment Agency, the National Parks Board and the Singapore Police Force. They oversee the sectors covered under PWM.

MOM has also encouraged needy employers to sign up for the Progressive Wages workshops conducted by the Singapore National Employer Federation. These workshops are reportedly subsidised and can help employers learn more about PWM.

Not only that, MOM said that eligible employers will automatically receive co-funding support under the Progressive Wage Credit Scheme to help them adjust to the PWM wage increase.

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Nadia Irdina