Employment Agencies to Provide Refund Option for Service Fees if Domestic Worker is Terminated Early

From 1 June 2022, employment agencies (EAs) must provide employers with a refund option of at least 50% of the service fees paid by the employer, if the migrant domestic worker’s (MDW) employment was terminated within the first six months of her employment. This measure encourages EAs to take stronger ownership in achieving a good match between MDWs and employers. 

2        The refund option will apply for up to three MDWs that the EA places with that same employer. The termination of employment must be within the first six months of employment (please refer to Annex for an illustration). The employer could request for a replacement MDW instead of a refund, if this is an option offered by the EA.

3        EAs will not be required to provide a refund if:

• There was no matching service provided by the EA – i.e., the EA was engaged by the employer solely to perform administrative work required to hire the MDW;
• The employer breaches any employment laws or commits any offence against the MDW; or
• The MDW was hired as a caregiver, and the caregiving need no longer exists (e.g., the person being cared for has passed away or has moved to alternative care).

4        Employers who are seeking a refund will need to inform their EA before the MDW’s employment is terminated. This would allow the EA to speak to both the MDW and the employer so as to understand the reason(s) for termination. With this understanding, the EA would then be able to provide better matches.

5        Mr Kevin Teoh, Commissioner for Employment Agencies and Divisional Director of the Ministry of Manpower’s Foreign Manpower Management Division, said: “The service fee refund policy is part of a series of measures to promote better matching of employers with MDWs who best meet their needs. This new measure was developed based on feedback from employers, EAs and NGOs. EAs play a crucial role in facilitating a good match between the employer and the MDWs.”

6        Ms K Jayaprema, President of AEA(S), the Association of Employment Agencies (Singapore), added: “The service fee refund policy represents the shared responsibility of EAs and employers, and encourages both parties to spell out job requirements clearly so that candidates can be matched fittingly. AEA(S) is confident that it will reduce grievances and contractual conflicts between EAs and employers.  AEA(S) has also worked with MOM to develop and issue a set of best practices to help EAs perform better matches, improve transparency and clarity upfront to reduce downstream disputes. AEA(S) will help guide EAs and employers to ensure the smooth implementation and adoption of the policy.”

7        More details on the refund policy can be found on MOM’s website.