Indonesian Embassy Sets New $6,000 Performance Bond For Foreign Domestic Workers In Singapore

So if you’ve set your heart on hiring a domestic helper from Indonesia, you may want to understand the new requirements first.

Ministry of Manpower (MOM) has issued an advisory regarding the Indonesian Embassy’s new $6,000 performance bond on Tuesday (8 May), according to Channel NewsAsia (CNA).

This is not a requirement of the Singapore’s government and is separate from MOM’s $5,000 security bond.

Let’s take a look at what’s in-store for would-be employers now.

MOM calls new bond “unnecessary”

Currently, the bond contract allows the Indonesian embassy to seek up to $6,000 from employers, without requiring proof of a breach of the embassy’s employment contract, according to CNA.

As the sum will have to be paid to insurers, MOM has reminded future employers to ensure they “have the means to repay” it.

However, MOM has informed the Indonesian Embassy that the new bond seems unnecessary, as Singapore’s framework acts as sufficient protection for domestic helpers.

They also added that conditions for forfeiting the bond remain unclear — pointing out the lack of a mediation and dispute resolution process, if the bond is forfeited.

How does a bond get forfeited?

Typically, an employer will have to pay a portion or the full amount of the bond, if the conditions attached are contravened.

This could mean that the employer fails to do the following things:

  • Paying a fixed monthly salary on time
  • Paying for medical treatment & exams
  • Providing acceptable living conditions
  • Paying foreign worker levy

If the FDW goes missing, only half of the bond will be forfeited as well. A police report must be filed, and the work permit cancelled within a week.

The helper has to be found within a month, or half the security bond will be lost.

These requirements are usually put in place, to ensure that living conditions and needs of the helper are met.

Philippines embassy bond

Currently, performance bonds do exist in Singapore, but for employers of Filipino helpers.

Since 1996, the amount has been set at:

  • $7,000 (for direct-hire)
  • $2,000 (employed via agency)

Indonesia will follow Philippines’ example, by imposing the new performance bond, with a few select differences.

Firstly, the bond amount does not seem to have varying tiers as compared to Philippines, which reduces the bond amount for FDWs hired via a reputable agency.

Additionally, Philippines embassy’s “fine print is very clear“, referring to the specific conditions to which the bond is forfeit, and available at more than 10 insurers.

For Indonesia’s embassy, only two insurers will be determining these conditions – namely AIG and Liberty Insurance priced at $70.

When does this bond take effect?

According to MOM, the bond came into effect from Feb 2018.

The requirement will impact employers hiring Indonesian FDWs, as long as the employment agency requests for the bond to be purchased.

Current employers of Indonesian FDWs will be sent a MOM advisory to “read and understand” the T&Cs carefully, before buying the performance bond.

MOM adds, that employers who are not “comfortable” with the new arrangement, can “reconsider” their hiring decisions.

Or perhaps employ a helper hailing from another country.

Read the T&Cs wisely

We definitely do welcome measures to improve Indonesian domestic helpers’ welfare in Singapore.

However, as MOM has rightfully pointed out, the contractual obligations on both side should be spelled out clearly.

As for employers in Singapore who have to satisfy the new requirements, definitely peruse the T&Cs properly, before committing to any agreement.

Featured image from Jerry Wong on Flickr and Channel NewsAsia.