Singapore’s Ministry of Manpower (MOM) has warned employers against using fixed monthly allowances to offset overtime payments for migrant workers, saying enforcement action will be taken against companies that continue to breach employment regulations.
The warning follows a recent High Court ruling that reaffirmed employers cannot include overtime pay within fixed monthly allowances stated in employment contracts.
Speaking in Parliament in response to a written question, Manpower Minister Tan See Leng said migrant workers who encounter such practices should report them to MOM.
“MOM will engage the companies concerned and, if necessary, take enforcement actions, including issuing warnings and imposing fines,” Tan said.
According to the ministry, the number of complaints received so far has been small. However, officials stressed that the practice remains unlawful under Singapore’s Employment of Foreign Manpower (Work Passes) Regulations.
The regulations prohibit employers of migrant workers from offsetting overtime payments using fixed monthly allowances specified in employment contracts.
The issue recently came under scrutiny after a case involving an Indian national on a work permit reached Singapore’s High Court. The worker had sought overtime payments from his former employer, who argued that the overtime had already been accounted for through fixed monthly allowances.
While the Employment Claims Tribunal initially allowed the overtime payable to be offset against the allowance, the High Court overturned the decision.
In its ruling, the court stated that fixed monthly allowances payable to an employee “shall not include any form of overtime payment.”
“An employer cannot reduce or cap such amounts by including them in fixed allowances paid to the worker,” the court added.
The ministry also outlined support mechanisms available to affected workers. Migrant workers facing overtime payment shortfalls can file claims through the Tripartite Alliance for Dispute Management (TADM).
Tan said workers with valid salary claims can remain in Singapore and seek alternative employment while their cases are being resolved through TADM or adjudicated at the Employment Claims Tribunals.
“For those who prefer to return to their home countries, remote mediation by TADM and adjudication by the ECT can be arranged,” he said.
Workers may also seek legal assistance through the Migrant Workers’ Centre, according to the ministry.