Indonesian maid supply slows down
Recruiters unhappy about earning less in fees after May policy change
Published on Jun 16, 2012
By Amelia Tan
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.'
Changes to policy
•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.
•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.
•Pays higher agency fee of about $1,200 to $1,600.
•Is exempted from giving maid a loan.
•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.
The current state of affairs can be tracked back to the Indonesian government's May1 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 May1, 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.'
News: Indonesian maid supply slows down
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