Did you know that Singapore issues close to one million work permits annually? Employers are expected to get a security bond for every foreign worker they employ. The security bond, also known as the immigration bond, serves as security should the worker fail to follow the work permit conditions. Security bond MOM costs $5,000.
The security deposit can be in cash or a banker’s guarantee. In some cases, employers replace the security deposit with Foreign Worker Bonds (FWB). When an employer buys FWBs, he doesn’t need to deposit the $5,000 security upfront. More information about Security Bonds (MOM, Singapore) can be found here.
Who purchases the security bond and why?
A security bond is a contract between the government and the employer. It is illegal for employers to ask employees to provide this security deposit. The idea behind the security bond is to ensure employers take great interest in the kind of people they employ.
Every employee with a security bond attached to his work permit is expected to strictly follow the work permit’s terms. Should the employee go against some aspects of the permit, the employer may be forced to forsake part or the entire security bond.
Are some foreign workers allowed to work without the security bond?
Yes, S pass holders are not required to have a security bond attached to their work permits. Singapore offers different types of passes and Work Permits for foreign workers. S Pass is given to mid-level skilled workers, like technicians, who earn at least $2,500 a month.
Applicants for S pass are expected to have a degree, diploma or technical certificate from accredited institutions. Additionally, relevant work experience is required. Employers are expected to vet applicants for the positions they have available to ascertain their eligibility for the S Pass.
Malaysian workers do not need work permits, so security bond MOM is not required.
Where can you buy the security bond?
You don’t need to go to the Ministry of Manpower (MOM) to get the security bond. You can get security bond MOM at the bank or from insurance companies in Singapore. The security bond is usually sold as an insurance product, either separately or as part of a package.
Should the government charge the employer a fine, the insurer will often pay the government. The insurer then recovers the funds from the employer.
What happens to the security bond when the work permit expires?
Security bonds are usually attached to the work permit. MOM will only issue a work permit when the employer secures a security bond MOM. Usually, work permits are valid for two years. However, some may be issued for a shorter period if the employee’s passport expires before the end of the two-year period or if the person’s employment is valid for less than 24 months.
If the employer and employee agree to renew the work permit, it needs to be done at least eight weeks before the permit expires. The employer also needs to visit the bank or insurance company to extend the security bond.
The insurer or bank will send the new security bond details to the Ministry so that it is also updated in their system. It usually takes about three days for the security bond to be updated.
The Ministry of Manpower (MOM) takes issues of foreign employees seriously. It is obligated to maintain Singapore’s integrity as a favoured destination for expatriates. The security bond ensures that employers only hire authentic people because they stand to forfeit the security bond if things go wrong.