Twelve Cupcakes Fined $119,500 For Underpaying 7 Employees From 2016-2018

Employers in Singapore should know that it is a crime to underpay employees — local and foreign. For each offence committed, a company may be fined up to $10,000.

Unfortunately, local bakery chain Twelve Cupcakes – founded by former DJ Daniel Ong and Jaime Teo – was fined for underpaying 7 foreign employees of about $114,000 over 2 years.

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A district judge presiding over the case had meted out the sentence in court today (12 Jan).

Twelve Cupcakes fined after pleading guilty

According to Channel NewsAsia (CNA), Twelve Cupcakes underpaid 7 employees – each promised a salary of between $2,200 and $2,600 – from 2016-2018.

As a consequence, they were fined a whopping sum of $119,500 today (12 Jan).

Last month, the company had pleaded guilty to 15 charges under the Employment of Foreign Manpower Act. Prosecutors sought a $127,000 fine for their offences.

Twelve Cupcakes Admits They Underpaid 7 Employees, Faces Up To $127,000 Fine

The judge had also taken 14 other similar charges into consideration before deciding on the sentence.

Judge agrees offences were hard to detect

The employees involved were S Pass holders, who were employed as:

  • 4 customer service executives
  • 2 sales executives
  • A pastry chef

Considering how long the underpayment had gone on for, the district judge agreed with prosecutors from the Manpower Ministry that the offences were “difficult to detect”, reports TODAY Online.

The judge also concurred that the company gained “substantial profits” and had even made several attempts to conceal the payment scheme after 2018.

Company has repaid all salaries owed

Even though the company underpaid employees up till Apr 2018, the employees affected were suddenly paid the correct amounts from May 2018.

However, they were later required to return some of their salary.

The judge duly noted that the company had repaid the employees all salaries owed, and pleaded guilty when given the chance.

Co-founders slapped with 24 charges last Dec

On 29 Dec 2020, the company’s co-founders Daniel Ong and Jaime Teo were each charged with 24 offences for letting Twelve Cupcakes underpay foreign employees between Sep 2012 and Dec 2016.

Twelve Cupcakes Co-Founders Charged For Underpaying Staff, May Be Fined Or Jailed If Guilty

 

This malpractice apparently continued even after the company was sold to Dhunseri Group in 2016.

Mr Ong’s trial was adjourned to 26 Jan, and is separate from today’s sentencing.

Both Mr Ong and Ms Teo may be jailed for up to a year, fined up to $10,000, or both per charge if found guilty.

A lesson for all companies

The offences committed by Twelve Cupcakes came as a shock, considering how the brand is popular among Singaporeans.

With today’s sentence, they have literally paid the price for underpaying manpower. The employees may be foreigners, but they have the right to earn a decent wage as promised.

We hope this case comes as a learning lesson for companies in Singapore to uphold integrity and the country’s manpower laws — they’re in place for good reason.

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Featured image adapted from Twelve Cupcakes.