Employment agencies to provide partial refund option if employers terminate maid's contract early

SINGAPORE: From June, employment agencies must provide employers with a refund option of at least 50 per cent of the service fees paid by the employer, should a maid's employment be terminated within the first six months of her employment.

This will encourage agencies to take "stronger ownership in achieving a good match" between migrant domestic workers and employers, the Ministry of Manpower (MOM) said in a release on Thursday (Mar 31). 

The new refund policy will only apply to all service fees paid on or after Jun 1, said MOM. 

Originally scheduled to be introduced in October 2021, the ministry announced in September last year that its implementation would be deferred to early 2022 to allow for more time to incorporate feedback on the policy from stakeholders.

The refund option will apply for up to three maids placed by an agency with the same employer, MOM said on Thursday, adding that employers can request for a replacement maid instead of a refund should the agency offer such an option.

However there are certain circumstances employment agencies will not be required to provide a refund, the ministry said. 

These include if there was no matching service provided by the agency, that is, if it was engaged by the employer purely to perform the administrative work required to hire the maid, or if the employer breaches any employment laws or commits any offence against the maid.

Agencies will also not have to refund employers if the maid was hired as a caregiver, and the caregiving need no longer exists, such as if the person being cared for has passed away or has moved to alternative care, said MOM.

Employers who are seeking a refund will need to inform the employment agencies before the maid's employment is terminated, the ministry said.

This will give the agency time to speak to both the maid and the employer so as to understand the reasons for termination, MOM explained, adding that this would allow the agency to provide better matches. 

Under this new policy, the refundable amount includes all fees paid by the employer to the agency except costs related to the entry and employment of the maids, costs imposed by the government of the maid's home country and the domestic helper's placement loan. 

“The service fee refund policy is part of a series of measures to promote better matching of employers with (migrant domestic workers) who best meet their needs," said Mr Kevin Teoh, commissioner for employment agencies and divisional director of MOM’s foreign manpower management division.

The measure was developed based on feedback from employers, employment agencies and non-governmental organisations, Mr Teoh added, noting the "crucial role" played by agencies in facilitating a good match between employers and maids. 

Ms K Jayaprema, President of AEA(S), the Association of Employment Agencies (Singapore), added: “The service fee refund policy represents the shared responsibility of (employment agencies) and employers, and encourages both parties to spell out job requirements clearly so that candidates can be matched fittingly." 

Ms Jayaprema added the association is confident the move will reduce grievances and contractual conflicts between agencies and employers.

She noted the association had also worked with MOM to develop and issue a set of best practices to help agencies "perform better matches, improve transparency and clarity upfront to reduce downstream disputes".

The association will help guide agencies and employers to ensure the "smooth implementation and adoption of the policy", she added.