Workers security bonds are required for all foreign workers in Singapore by the Ministry of Manpower.
Each non-Malaysian work permit holder requires a $5000 cash deposit or security bond, which your business can secure with either a banker’s or insurance guarantee for the workers’ security bonds.
Who and when to buy the workers security bonds?
This worker security bond must be provided by the company and not paid by the workers.
The company must buy security bonds BEFORE the workers arrive in Singapore. Hence you must arrange with your insurance company or bankers to have the workers’ security bonds in place. If not, it will be an expensive mistake as Singapore ICA will refuse entry to them and you will have to send them home at your expenses.
How does foreign worker security bond insurance works?
The insurance companies will provide the workers’ security bond of $5000 per worker to MOM instead of your business providing the capital cash deposit upfront. This will allow your business cash flow to be better, and pay the insurance firm a small premium instead.
When will the security bonds be discharged?
The bond insurance will be discharged when you
- cancelled the work permit AND
- the worker has returned home AND
- you have not broken other conditions.
MOM will discharge the bond 1 week after the above and send you a letter to inform you.
When will the security bonds be forfeited by MOM?
The bonds will be forfeited if you
- do not pay your workerssalaries on time
- broke any of the conditions of the work permit or security bond
- failed to send them back before expiry / cancellation of work permit
- lost the whereabouts of your workers
For point 4, if your worker goes missing and you do file a police report and made efforts to search for and locate the workers, MOM will return half ($2500) of the security bond to you or the insurance company.
What will security bond insurance do if workers go missing?
When the bonds are forfeited, the insurance company will make good the security bonds payment to MOM and you do not have to pay up if the situation is unforeseen and unplanned for.