Criminal charges against company director signal stricter enforcement environment

IMPACT – MEDIUM

What is the change? In the latest in a series of recent enforcement actions, the Ministry of Manpower has charged a company director with making false salary declarations on work pass applications and renewals.

What does the change mean? Employers should take this as a compliance reminder that MOM is prosecuting employers who are making false statements on work pass applications and applying heightened scrutiny to work pass applications in general.

• Implementation timeframe: Ongoing.
• Visas/permits affected: All work passes.
• Who is affected: Companies and foreign workers making salary declarations and other claims on applications.
• Impact on processing times: No impact.
• Business impact: Businesses should be aware of the heightened enforcement and conduct internal compliance checks.
• Next steps: Companies should review compliance procedures and, in particular, make sure their salary declarations match actual salaries paid.

Background: On Nov. 20, MOM charged a restaurant director with falsely stating the salaries of 12 foreign employees, including three managers and several chefs and cooks, on S Pass and Employment Pass applications and renewals. After the passes were approved, the employees were paid less than the stated amounts.

Regulations contained in the Employment and Foreign Manpower Act make it illegal to provide false salary information to obtain a work pass. The offense is punishable by up to 20,000 SGD in fines and/or two years in prison, as well as prohibition from employing foreign workers.

The case is evidence of the continuing crackdown since enactment of the amended regulations in 2012. In February, several foreign employees were convicted for inflating their salaries on applications and providing fake school records. In June, a computer company director was charged with 20 counts of inflating salaries on work pass applications for software engineers.

BAL Analysis: The continued enforcement actions highlight the increased scrutiny on work pass applications. Employers are cautioned that the overall environment has grown increasingly strict in the past year. In addition to stepping up enforcement, MOM appears to be applying a more exacting interpretation of eligibility criteria for work passes.

This alert has been provided by the BAL Global Practice group in Singapore. For additional information, please contact singapore@bal.com.

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