The Foreign Domestic Workers in Singapore, Hong Kong, and Taiwan: Should Minimum Wage Apply to Foreign Domestic Workers?

Abstract

With the number of foreign domestic workers increasing in different countries around the world, governments have also begun to pay attention to issues related to the rights of foreign domestic workers. This article presents a comparison and analysis of foreign domestic workers employment policies, working conditions, and minimum wage in Singapore, Hong Kong, and Taiwan. We found foreign domestic workers in Asian countries lack access to regular forms of migration and safe migration channels; low wages; long working hours; exploitative working conditions; nonrecognition of domestic work under labor laws, and mistreatment in domestic work conditions. In addition, this article investigates from social welfare, economic, and legal perspectives, the feasibility of applying minimum wage to foreign domestic workers. The results show that foreign domestic workers’ wages should not be decoupled from the minimum wage, and foreign domestic workers should not be treated as a separate group of workers in minimum wage policy. Long-term care systems should incorporate the foreign domestic worker labor pool, which could provide the additional personnel necessary for the nation’s long-term care.

Keywords:

• foreign domestic workers
• long-term care
• minimum wage

Notes

U.S. dollar to Singapore dollar exchange rate: 1.382 SGD/1 USD for May 20 2016.

With regard to employment of caretakers and foreign domestic workers, Singapore is significantly more lenient in terms of hiring criteria. Industries in Singapore also enjoy a greater degree of freedom for employment of foreign workers, except with restrictions on labor imports being limited to the 3D (dirty, dangerous, and difficult) industries. These are the main differences between Singapore and Taiwan in terms of labor import development, restrictions on occupations, industries, and numbers.

For a comprehensive list of recognized certificates from the respective countries, refer to the official website of Singapore’s Ministry of Manpower at http://www.mom.gov.sg/Documents/services-forms/passes/Educational-Requirements-for-First-time-FDW.pdf.

The concessionary levy for foreign domestic worker has been reduced from 120 SGD to 60 SGD starting from May 1, 2015, and the age requirement for children in the household for the concessionary levy has been raised from 12 to 16.

For Singapore’s Occupational Wages Table for 2013, visit http://stats.mom.gov.sg/Pages/Occupational-Wages-Tables-2013.aspx.

More details are available in the report “Projection of Foreign Manpower Demand for Healthcare Sector, Construction Workers and Foreign Domestic Workers,” an Occasional Paper released by the National Population and Talent Division, Prime Minister’s Office, November 2012.

Refer to Dickinson (2016).

Statutory Minimum Wage (SMW) has come into force since May 1, 2011. From May 1, 2015, the SMW rate was raised from $30 per hour to $32.5 per hour. Concurrently, the monetary cap on the requirement of employers keeping records of the total number of hours worked by employees was also revised to $13,300 per month.

Starting from 1973, the “Employment Ordinance” stipulated the MAW for foreign domestic workers in Hong Kong. The MAW and the food allowance were set at 450 HKD and 100 HKD, respectively.

Refer to Petition to increase MAW for foreign domestic workers to 4,500 HKD in Apple Daily on August 15, 2014 at http://hk.apple.nextmedia.com/news/art/20140815/18832883.

By virtue of the Employees Retraining Ordinance (No. 2) Notice 2008, the obligation of all employers of foreign workers to pay the levy had been suspended for five years, effective from August 1, 2008 through July 31, 2013. The period was known as the “levy suspension period.”

According to the data published by the Census and Statistics Department of the Government of Hong Kong, per capita GDP of Singapore was 310,113 HKD in 2014 (approximately US$ 40,015), while the monthly wage for workers in the manufacturing industry was 13,224 HKD (approximately US$ 1,706). In comparison, per capita GDP of Taiwan in 2014 was NT$ 687,343 (approximately US$ 22,760), and the monthly wage for the domestic manufacturing workers was NT$ 45,207 (approximately US$ 1,497).

Starting from 2001, eligibility for hiring foreign domestic workers in Taiwan has been determined by a need-based point system and applicants must score 16 points or higher in order to be eligible for application, which is subjected to strict review.

Refer to the Population Projection Report for Taiwan: 2012 to 2060 (2013) published by the Council for Economic Planning and Development at http://iknow.stpi.narl.org.tw/Post/Files/policy/2012/policy_12_037_2.pdf.

The model of foreign caregiver outreach care service involves the import of foreign caregivers by designated institutions, which dispatches the said caregivers to their employers’ households to perform the required services.

If the care-receiver or the employer has been deemed as one from a low-income family as defined in the Public Assistance Act, the employment security fee is reduced to NT$ 600 per month. If the care-receiver or the employer is a recipient of either a living allowance for mid- or low-income elder (pursuant to Regulations on Living Allowance for Mid or Low-income Senior Citizens) or has physical/mental disabilities, the required employment security fee is NT$ 1,200 per month.

Although the Taiwanese government had attempted to cover domestic workers under the scope of the Labor Standards Act on April 1, 1998, the implementation was fraught with difficulties in terms of fitness and consequently, the Ministry of Labor excluded domestic workers from the scope of the Labor Standards Act effective from January 1, 1999.

For example, when a country restricts the duration of the working period for foreign workers, it results in more foreign workers returning to their home countries; but limitations of foreign workers’ cultural rights usually end up creating further social and public order issues.

The wage for foreign domestic workers in Taiwan has been disconnected from the normal basic wage since 1997 and has remained stagnant for 18 years without any adjustments. The Indonesian government has ever announced that the country will end export of migrant workers by 2017 and will cease to send Indonesian women to other countries to work as domestic helpers. In July 2015, the Indonesian government also demanded that the wage for Indonesian domestic workers be raised from NT$ 15,840 to NT$ 17,500 and any applications with wages lower than the required amount would be directly rejected by the Indonesian Economic and Trade Office to Taipei, thereby forcing the Ministry of Labor to enter into an official negotiation with the Indonesian government regarding the wages of Indonesian domestic workers in Taiwan.

Refer to the Department of Information Services, Executive Yuan at http://www.ey.gov.tw/en/cp.aspx?n=F3F1F5E84471C81C.

Refer to the Census and Statistics Department at http://www.censtatd.gov.hk/home/index.jsp.

Becker (1971) pointed out that discrimination against laborers by employers results in ineffective workforce utilization; García-Mínguez and Sánchez-Losada (2003) demonstrated in their analysis that it is possible to boost economic growth by offsetting wage discrimination with transfer policy. Baldwin and Johnson (1992) showed that wage discrimination leads to lower employment.

Refer to Hwang, Wang, and Chung (2011).