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Published on 27 Jan 2024 by ODJ
Actually, the term "Placement Fees" is a bit general and has many different interpretations. But typically it involves fees that employment agencies charge to assist in recruiting and placing domestic helpers, now formally called "Migrant Domestic Workers" (MDWs) by MoM.
Placement fees typically consist of two main components: 1. agency service fees and 2. charges for incurred expenses (such as medical, transport, levies, etc.). To safeguard customers, the Ministry of Manpower (MoM) has mandated that employers must receive a detailed breakdown of these fees from their agent, so they know what they are paying for, to ensure transparency in the hiring process.
All these charges can add up to a significant amount, ranging between S$2000 to S$5000+, depending on circumstances. Typically, the agency then communicates to the employer that a portion of these charges can be offset from the MDW’s salary through deductions. Alternatively, the agency may provide a loan to the helper to recover some of these costs, with the understanding that the employer will reimburse this loan loan to them and collect the repayment from the MDW.
To protect MDW’s, the Ministry of Manpower (MoM) prescribes that “Singapore employment agencies (EAs) are allowed to collect no more than 1 month of a worker’s fixed-monthly salary for each year of service, capped at 2 months' salary”.
Nevertheless, the term “Singapore Agencies” do not include Non-Singapore agencies. As a consequence, there are instances where helpers are obliged to enter into financial commitments in their home country, using their salary to pay for additional fees to foreign agencies involved. Hence, the helper still ends up with large financial commitments.
Why is that an issue and wat should employers and helpers look out for?
Hidden financial commitments can wreak havoc. Therefore, employers are strongly advised to insist on complete transparency of the helper’s financial obligations, and this disclosure should be formally endorsed by the agency. This is in the best interest of both the employer and the helper. Apart from the ethical considerations, having a financially indebted helper puts the employer at risk of dealing with stress, depression, vulnerability to corruption, and distraction due to the helper’s financial challenges. It is therefore important to create a clear picture to enable arrangements that are realistic, fair, and manageable for all parties.
Ideally, all expenses would be paid by the employer, being the financially stronger party. The employer would factor in these costs when determining the salary. However, this approach poses a dilemma that the helper may leave prematurely before these costs have been offset by her work.
In my view, this risk should be carried equally by all the stakeholders, including the agency, the helper and the employer. They all have the responsibility to ensure that the selection process is thorough, the signed contract is fair and transparent, and that each of them makes an effort to make the execution successful.
The Ministry of Manpower (MoM) now requires agencies to refund a minimum of half of their service fee to the employer if the helper leaves prematurely. This creates an incentive for agencies to ensure successful placements. Some agencies offer replacements instead though. To keep the helper committed it is advisable to also agree on a reasonable amount with her that she will forfeit if she leaves within the first 6 months. This agreed-upon amount can be lowered monthly and the total should not exceed one month’s pay in total.
The employer bears the greatest risk; and hence, it is very important for the employer to know what they are on the hook for and for the employer to play an active role in the recruitment process and being discerning when choosing a helper. With thousands of profiles available on https://ministryofhelpers.com there is however never lack of choice.
Having a platform like Ministry of Helpers (MoH) allows employers to do the matching and selection process independently, free from the influence of agencies. Taking a more active role in the recruitment will support better awareness of what the profile of their future helper is like, ensure transparent recruitment processes as well as hopefully help improve the retention rate of domestic helpers - the mission that MoH embarked upon four years ago.
Ethical platforms like the Ministry of Helpers prioritise fair treatment of domestic helpers. We ensure that helpers are not subject to exploitation, unreasonable fees, or unethical practices, fostering a more equitable employment environment. Our commitment includes providing transparent fee structures that clearly outline the costs associated with hiring a domestic helper. This transparency helps employers in making informed decisions and helps them avoid hidden or excessive charges.
Our main goals is to enable high-quality matching, connecting employers with domestic helpers whose skills, experiences, and preferences align with their specific needs. This then leads to more successful and harmonious working relationships. Additionally, our partners provide comprehensive support to employers throughout the hiring process via our Concierge Services, offering guidance on legal requirements, assistance with paperwork, and access to resources that facilitate a smooth and ethical hiring experience.
Partnering with Ministry of Domestic Helpers (MoDH)
Ministry of Domestic Helpers Pte Ltd (MODH) is the platform agency partner, the entity that holds an Employment Agency license and serves as the preferred agency of choice for the MOH platform. After an employer successfully matches with a helper on the platform, they have an option to engage MODH (or any other agency) for the onboarding process. MODH offers this service for a modest fixed fee, without unnecessary costs for the helper. Moreover, MODH ensures that the helper discloses all financial arrangements they are involved in. For certain helper nationalities, employers can handle the entire process independently online; in which case, the support of an agent is not required and thus, the service fee will be zero.
Why do you need to be discerning when it comes to agencies?
The primary concern is ethics. The financial terms for the helper and their financial obligations are a key attention point. Some employers hold the misconception that having a helper in debt is advantageous, as it might discourage them from leaving. However, this is a harmful misunderstanding. A helper burdened with debt is likely to experience significant stress and easy dissatisfaction in their work. Moreover, being in debt may drive them to resort to theft or seek part-time employment. There's also the risk of loan sharks harassing your helper and your family, potentially causing difficulties for everyone involved.
In addition to these concerns, unethical agencies may misrepresent information about domestic helpers, including their qualifications, experiences, or medical conditions. This misrepresentation can result in mismatches between employers and helpers, causing dissatisfaction and potential conflicts. Employers may also experience unreliable or inadequate support from unethical agencies, including poor assistance in the hiring process, a lack of guidance on legal requirements, and insufficient help in addressing issues that may arise before, during or after the employment period.
Financial Literacy for MDWs
Ministry of Helpers also encourages ongoing training and financial literacy for domestic helpers in Singapore, aiming to help them avoid falling into debt and engaging in other unscrupulous financial transactions. This is why we partnered with Step Up Videos Singapore and are pleased to offer a 10% discount on their classes and training to our Standard and Premium Subscribers.
In conclusion, when searching for maids near me or considering hiring a domestic helper, it's important to weigh the costs involved, such as the placement fee. Opting for a no placement fee agency or finding a part-time maid in Singapore with no agency fee can be a more cost-effective solution. By carefully selecting the right maid service, you can ensure a smooth hiring process while managing expenses efficiently.
Actually, the term "Placement Fees" is a bit general and has many different interpretations. But typically it involves fees that employment agencies charge to assist in recruiting and placing domestic helpers, now formally called "Migrant Domestic Workers" (MDWs) by MoM.
Placement fees typically consist of two main components: 1. agency service fees and 2. charges for incurred expenses (such as medical, transport, levies, etc.). To safeguard customers, the Ministry of Manpower (MoM) has mandated that employers must receive a detailed breakdown of these fees from their agent, so they know what they are paying for, to ensure transparency in the hiring process.
All these charges can add up to a significant amount, ranging between S$2000 to S$5000+, depending on circumstances. Typically, the agency then communicates to the employer that a portion of these charges can be offset from the MDW’s salary through deductions. Alternatively, the agency may provide a loan to the helper to recover some of these costs, with the understanding that the employer will reimburse this loan loan to them and collect the repayment from the MDW.
To protect MDW’s, the Ministry of Manpower (MoM) prescribes that “Singapore employment agencies (EAs) are allowed to collect no more than 1 month of a worker’s fixed-monthly salary for each year of service, capped at 2 months' salary”.
Nevertheless, the term “Singapore Agencies” do not include Non-Singapore agencies. As a consequence, there are instances where helpers are obliged to enter into financial commitments in their home country, using their salary to pay for additional fees to foreign agencies involved. Hence, the helper still ends up with large financial commitments.
Why is that an issue and wat should employers and helpers look out for?
Hidden financial commitments can wreak havoc. Therefore, employers are strongly advised to insist on complete transparency of the helper’s financial obligations, and this disclosure should be formally endorsed by the agency. This is in the best interest of both the employer and the helper. Apart from the ethical considerations, having a financially indebted helper puts the employer at risk of dealing with stress, depression, vulnerability to corruption, and distraction due to the helper’s financial challenges. It is therefore important to create a clear picture to enable arrangements that are realistic, fair, and manageable for all parties.
Ideally, all expenses would be paid by the employer, being the financially stronger party. The employer would factor in these costs when determining the salary. However, this approach poses a dilemma that the helper may leave prematurely before these costs have been offset by her work.
In my view, this risk should be carried equally by all the stakeholders, including the agency, the helper and the employer. They all have the responsibility to ensure that the selection process is thorough, the signed contract is fair and transparent, and that each of them makes an effort to make the execution successful.
The Ministry of Manpower (MoM) now requires agencies to refund a minimum of half of their service fee to the employer if the helper leaves prematurely. This creates an incentive for agencies to ensure successful placements. Some agencies offer replacements instead though. To keep the helper committed it is advisable to also agree on a reasonable amount with her that she will forfeit if she leaves within the first 6 months. This agreed-upon amount can be lowered monthly and the total should not exceed one month’s pay in total.
The employer bears the greatest risk; and hence, it is very important for the employer to know what they are on the hook for and for the employer to play an active role in the recruitment process and being discerning when choosing a helper. With thousands of profiles available on https://ministryofhelpers.com there is however never lack of choice.
Having a platform like Ministry of Helpers (MoH) allows employers to do the matching and selection process independently, free from the influence of agencies. Taking a more active role in the recruitment will support better awareness of what the profile of their future helper is like, ensure transparent recruitment processes as well as hopefully help improve the retention rate of domestic helpers - the mission that MoH embarked upon four years ago.
Ethical platforms like the Ministry of Helpers prioritise fair treatment of domestic helpers. We ensure that helpers are not subject to exploitation, unreasonable fees, or unethical practices, fostering a more equitable employment environment. Our commitment includes providing transparent fee structures that clearly outline the costs associated with hiring a domestic helper. This transparency helps employers in making informed decisions and helps them avoid hidden or excessive charges.
Our main goals is to enable high-quality matching, connecting employers with domestic helpers whose skills, experiences, and preferences align with their specific needs. This then leads to more successful and harmonious working relationships. Additionally, our partners provide comprehensive support to employers throughout the hiring process via our Concierge Services, offering guidance on legal requirements, assistance with paperwork, and access to resources that facilitate a smooth and ethical hiring experience.
Partnering with Ministry of Domestic Helpers (MoDH)
Ministry of Domestic Helpers Pte Ltd (MODH) is the platform agency partner, the entity that holds an Employment Agency license and serves as the preferred agency of choice for the MOH platform. After an employer successfully matches with a helper on the platform, they have an option to engage MODH (or any other agency) for the onboarding process. MODH offers this service for a modest fixed fee, without unnecessary costs for the helper. Moreover, MODH ensures that the helper discloses all financial arrangements they are involved in. For certain helper nationalities, employers can handle the entire process independently online; in which case, the support of an agent is not required and thus, the service fee will be zero.
Why do you need to be discerning when it comes to agencies?
The primary concern is ethics. The financial terms for the helper and their financial obligations are a key attention point. Some employers hold the misconception that having a helper in debt is advantageous, as it might discourage them from leaving. However, this is a harmful misunderstanding. A helper burdened with debt is likely to experience significant stress and easy dissatisfaction in their work. Moreover, being in debt may drive them to resort to theft or seek part-time employment. There's also the risk of loan sharks harassing your helper and your family, potentially causing difficulties for everyone involved.
In addition to these concerns, unethical agencies may misrepresent information about domestic helpers, including their qualifications, experiences, or medical conditions. This misrepresentation can result in mismatches between employers and helpers, causing dissatisfaction and potential conflicts. Employers may also experience unreliable or inadequate support from unethical agencies, including poor assistance in the hiring process, a lack of guidance on legal requirements, and insufficient help in addressing issues that may arise before, during or after the employment period.
Financial Literacy for MDWs
Ministry of Helpers also encourages ongoing training and financial literacy for domestic helpers in Singapore, aiming to help them avoid falling into debt and engaging in other unscrupulous financial transactions. This is why we partnered with Step Up Videos Singapore and are pleased to offer a 10% discount on their classes and training to our Standard and Premium Subscribers.
In conclusion, when searching for maids near me or considering hiring a domestic helper, it's important to weigh the costs involved, such as the placement fee. Opting for a no placement fee agency or finding a part-time maid in Singapore with no agency fee can be a more cost-effective solution. By carefully selecting the right maid service, you can ensure a smooth hiring process while managing expenses efficiently.