Company Offered $1.7K Monthly Pay But Put $1k As Allowance So OT Pay Will Be Much Lower

By
George Yang
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During this pandemic, having a job becomes a blessing as companies all over Singapore were killed by the coronavirus.

But sometimes, it’s because of this lack of jobs that employers took advantage of their employees.

Like this company.

Company Offers $1.7K Monthly Pay But Log $1k As Allowance to Avoid High OT Pay

In a Reddit thread, a person related how his auntie had got a job offer as a packer from a food processing factory, which is an essential business.

Suffice to say, the company is probably making a killing now.

The offer is simple: $1.7k per month excluding OT and other allowances. Pretty decent, right?

But hold on, because there’s a fine line in everything, including this offer.

The $1.7k is split into two components: the basic salary is $700 and there’s a $1k allowance.

Is the company trying to siam CPF payment for the allowance then?

No, because CPF is still payable for allowance unless it’s an internship. You can watch more about CPF with this video:

And also more about your salary here:

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So what’s the company trying to do?

For a start, there’s a chance that the company could just remove the allowance altogether since that’s not considered a pay cut, but that might not be their goal since removing it would definitely lead to the employee’s resignation.

Instead, it turns out that they’re allegedly trying to avoid high OT pay, given that there should be lots of it now when everyone’s buying processed food home.

You see, OT pay is usually 1.5 times of the basic hourly salary.

For example, if your salary per month is $1,000, then your basic hourly rate is $5.68 if you work 44 hours a week ($1,000 divided by the total hours worked in a month, which is 176 hours).

If so, then your OT pay should be $8.52 per extra hour you work.

So here’s how the company managed to pay a lower amount for OT hours with this “split pay”.

If the basic salary is $1.7k, the basic hourly rate would be about $9.65, and one OT hour would be $14.46.

But if the basic salary is mere $700, then the basic hourly rate would be about $3.97, and one OT hour would be $5.97—that’s even lower than the basic hour if the basic is $1.7k per month.

Image: mrwgifs.com

Smart?

Smart. If you’re the employer, that is.

Processed Food Now in High Demand

There’s a reason why most companies in the world are reducing their headcount while this particular company is recruiting.

According to a CNA article last month, NTUC FairPrice has said that demand for frozen foods, processed food and vegetables increase by 20% compared to the last two months.

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That means food processing companies would require more manpower to fill up the increased demand.

But unlike Sheng Siong that paid their staff an additional one month’s salary after their business picked up during the COVID-19 period, this food processing factory did the opposite—reducing expenses even when sales have supposedly increased.

Of course, the Redditor has not named the company, but let’s just say that it’s times like this that you know whether your employer is a saint or a devil.

I know mine’s a saint. He agreed to let everyone continue working as long as we pay him instead of him paying us, because we’re no longer using the office’s internet, air-con and laptops.

Smart. I love Goody Feed and love that the boss is reading every of our article.

Here’s a simplified summary of the South Korea martial law that even a 5-year-old would understand:

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George Yang
Email: [email protected]