PAYMENT OF FOREIGN MAIDS' LEVY BY GIRO

Mr Ling How Doong asked the Minister for Labour why his Ministry insists that employers pay their foreign maids' levy by GIRO on pain of having their applications refused or permits revoked.

The Minister for Labour (Dr Lee Boon Yang): Mr Speaker, Sir, currently, about one-third of employers of foreign domestic workers pay the foreign worker levy of $300 a month by GIRO. The remaining two-thirds pay the monthly levy by cash or cheque. Paying the foreign worker levy by cash or cheque is not only more inconvenient than GIRO but can also lead to problems if employers forget to pay the levy or fail to pay the levy on time. This is because failure to pay the foreign worker levy will result in the cancellation of the work permit for the worker involved. The employer will then have to apply for reinstatement of the work permit which requires time and effort.

Such situations not only inconvenience employers but also create unproductive work for the staff of the Work Permit and Employment Department as each case has to be reviewed individually. Hence, the implementation of compulsory GIRO payment of the foreign worker levy is to reduce the inconvenience to employers as well as to enhance the productivity of the Department. Adopting the GIRO mode of payment is also in line with the national effort to reduce the need for regular cash or cheque payments.

My Ministry has therefore decided that approval for all new work permit applications or renewals for foreign domestic workers submitted on or after 1st September this year will be on condition that the employer pays the foreign worker levy through GIRO. Employers who are currently employing foreign domestic workers will be required to switch to GIRO only when renewing their workers' work permit. Hence, no work permit will be revoked.

Mr Ling How Doong: Would the Minister agree with me that this impinges on the right of individuals in the sense that indirectly you are saying that the Singapore money is not legal tender and a cheque from a bank is also not legal tender? Neither is postal order. It will be a very dangerous precedent to set here because there will be nothing to prevent private enterprise from imposing the same condition, more so if it is a monopolistic organisation outside. They can insist that if you want to buy this good, you pay by means of a gold bar or something else.

Dr Lee Boon Yang: Mr Speaker, Sir, I think the Member is grossly exaggerating the situation. What we have done is to require those who apply for a work permit to employ a domestic worker, as part of the condition for the approval of such a permit, to make payment of the levy through GIRO. This is for the employer's convenience and also to improve productivity and reduce unnecessary work on the part of the processing department and the collecting agency. We are not saying that by doing so, the Singapore currency is no longer recognised as a medium of monetary transaction. Nothing of that sort. All I am saying is that if you want to employ a foreign domestic worker, you have to comply with certain conditions. There are conditions attached to every approval for a work permit. Among the many conditions that are attached is the one that requires you, as the employer, to pay the levy by GIRO deduction.

Dr Kanwaljit Soin (Nominated Member): Sir, would the Minister confirm whether this regulation applies to employers of all foreign workers, or only to employers of domestic foreign workers?

Dr Lee Boon Yang: Mr Speaker, Sir, as a first step, we have decided to impose this requirement on those who employ domestic workers with effect from 1st September 1994. My Ministry will review whether there is a need to also extend this to all the other employers, in other words, the commercial employers of foreign workers. This is a matter that we will study and we will make a decision at a later stage.