On July 14, 2008 Singapore's Ministry of Manpower (MOM) will implement new conditions for companies hiring unskilled foreign workers. The regulations are designed to prevent profiteering by employers and employment agencies through placing foreign workers.


In Singapore, it is common for employment agencies to charge foreign unskilled workers from Southeast Asia and China as much as S$10,000 each (about US$7,340) for an opportunity to work legally in Singapore. Although part of this fee covers flight tickets and visa applications, S$2,000 to S$3,000 is often passed on directly to the prospective employer. This has made it very attractive for companies in Singapore, both foreign and domestic, to hire foreign laborers. Under current labor regulations, employers in Singapore have the unilateral right to cancel work permit applications, making the system much less risky for companies than employees.


Under the new rules issued by the MOM, employers accepting any type of reimbursement (whether monetary or in-kind) in exchange for hiring foreign unskilled workers will be subject to fines up to S$5,000 (about US$3,670) and six months in jail.


These new regulations will affect companies hiring employees possessing a Singapore "Work Permit or "S Pass. The Work Permit, also known as an "R Pass, is reserved primarily for foreign domestic workers who earn less than S$1,800 (about US$1,321) per month. The S Pass applies to unskilled foreign workers who earn between S$1,800 and S$2,500 (about US$1,835) per month. The regulation does not apply to foreign workers holding the "Q, "P1 or "P2 Passes for higher-skilled employees.