Indonesian maid supply slows down

Recruiters unhappy about earning less in fees after May policy change

By Amelia Tan, The Straits Times, 16 Jun 2012

THE supply of Indonesian maids headed here has slowed to a trickle amid a renegotiation of the way the cost of recruiting these maids is shared out.

At least 500 Indonesian women recruited to be domestic workers here are undergoing training in their home country, but no one is doing the paperwork needed for them to leave the country.

Ms K. Jayaprema, who heads the Association of Employment Agencies here, said: 'The maids are in the training centres, but no one is following up on them, so they aren't coming to Singapore.'

The current state of affairs can be tracked back to the Indonesian government's May 1 change in policy on how to cover the cost of recruiting these maids.

This change has resulted in Indonesian recruiters earning less in placement fees.

They have thus put pressure on Singapore maid agencies to pay them under-the-table money of up to $1,000 - or they will stop sourcing for these maids.

Some maid agencies here have caved in to the pressure, or are about to do so, and will, in all likelihood, pass on the cost of these bribes to employers of maids.

Mr Sukmo Yuwono, a counsellor at the Indonesian Embassy here, says Indonesia's Labour Ministry is looking into increasing the placement fee now borne by maids to pay for previously unaccounted-for items, such as transport.

But the ministry has not said when it will decide on this.

Mr Sukmo, urging Singapore maid agents to be patient, said: 'The problem is that some of these agents want the maids quickly. They don't want to follow the rules and will pay extra money to the middlemen.'

Recruiters and Singapore agents who do not play by the rules could stand to lose their accreditation with the Indonesian government, he said.

Jakarta had announced that from May 1, it would implement a formula for sharing the recruitment cost that would, it said, make the process of hiring an Indonesian maid costlier - but less risky - for employers here.

With the change, Singapore employers no longer pay upfront a $3,000 placement fee; this is the sum they have so far been recovering by docking the maid's salary in her first year here.

However, the one-time agency fee of $400 to $600 that employers used to pay will spike to between $1,200 to $1,600.

The placement fee, which pays for costs like training, will instead be borne by the maid, who will finance it through a loan she takes from an Indonesian bank.

The hike in the one-time agency fee employers pay is linked to a lowering of the placement fee to about $1,600 for maids with no experience, and about $800 for those with experience.

Placement fees now cover the commissions earned by maid agencies and other recruitment middlemen; the new placement fee borne by the maid strips out these fees and lets agencies put them on employers' tabs instead.

Some maid agents say recruiters will source for maids if they are paid more.

Nation Employment managing director Gary Chin said: 'The recruiters are not happy because they are taking a big cut in their fees.

'We may have to increase their fees and maid agents can't absorb this increase. Employers must be prepared to pay more.'

Best Home Employment director Tay Khoon Beng said: 'Things have dragged on for too long. If the cost structure needs to change, we should discuss it openly and stick to the new fees.'

Changes to policy

CURRENT SYSTEM

Employer:

- Pays fee of $400 to $600 to the maid's agency to cover the cost of advice given. 

- Lends maid about $3,000 to pay a 'placement fee', which covers the costs of her medical check-up, document processing and training.

Maid:

- Repays employer the $3,000 placement fee in instalments. This means she typically gets only $10 or $20 of her monthly salary for the first eight months or so.

NEW SYSTEM

Employer:

- Pays higher agency fee of about $1,200 to $1,600. 

- Is exempted from giving maid a loan.

Maid:

- Takes a bank loan to pay the placement fee of about $1,600 if she has no experience with this type of work, and about $800 if she does.

The placement fee will cover only the cost of medical check-ups, document processing, training and profits for the Indonesian training centres.

- Repays the bank loan in eight months with monthly instalments deducted from her salary. She gets her full salary after this.

Jakarta policy riles maid agents here

They want embassy officials to state S'pore agents can charge maids fees

By Amelia Tan, The Straits Times, 18 Jun 2012

MAID agents - unhappy with a new policy by the Indonesian government that bars agencies from earning commission from maids - hope to resolve the issue with the Indonesian Embassy here.

They want the president of the Association of Employment Agencies (Singapore) (AEAS), Ms K. Jayaprema, to meet the embassy officials.

The agents said the officials should come out to say that Singapore agents can charge Indonesian maids commission and not face repercussions such as being blacklisted by the embassy.

If the embassy does not do this, the agents said they will have to pass on the cost of the commission, which generally ranges from 11/2 to two months of a maid's salary, to employers.

Employers will likely baulk at having to pay, say the agents, who added that they cannot absorb the fees as it will cause a huge dent in their profit margins.

An Indonesian maid earns about $450 a month.

Mr Sukmo Yuwono, a counsellor at the Indonesian Embassy here, said in response to queries from The Straits Times that Jakarta 'does not encourage' maid agencies here to charge the maids commission but is aware that it would be difficult to enforce Indonesian government regulations here.

He added: 'If the maid agencies in Singapore want to charge maids fees for their services, they must get the Indonesian recruiters and maids to agree to it.'

In a further sign of their unhappiness, about 40 maid agents have signed a letter requesting that the management committee of AEAS hold an extraordinary general meeting to discuss the association's stand on the issue.

Ms Jayaprema responded in an e-mail last week that she will do so at a date to be confirmed.

The new guideline implemented by the Indonesian government on May 1 is part of broader changes introduced to bring down the costs incurred by maids when they look for a job overseas.

Under the previous system, Singapore agents could charge Indonesian maids placement fees to cover costs such as advice and housing before an employer is found - but they cannot do so now.

The agents said they are entitled to these fees as the Employment Agencies Act states that employment agencies in Singapore can charge the worker a fee not exceeding one month of the salary, for each year of the duration of the work pass or employment contract. The total amount they can charge must not exceed two months of the worker's salary.

Maids work on two-year contracts.

The rule changes have led to a slowdown in the supply of Indonesian maids and are raising frustration among agents.

Vine Employment Agency owner Yong W.P., who rallied other agents to request for the extraordinary general meeting, said: 'It is unfair not to get paid for our services. If the maid has problems, agents spend time counselling both her and her employer.'

Mr Karl Tan, who owns Inter-Mares agency, said: 'We will have to pass on the cost to employers. And the increased costs will shock employers.'

A spokesman for the Ministry of Manpower noted that while source countries may choose to impose additional requirements, 'employers and employment agencies should assess whether they can fulfil these conditions when choosing which source country to bring workers from'.

There are now some 206,000 maids here and about half of them are from Indonesia.