As an employer, it is compulsory for you to purchase a security bond for each non-Malaysian foreign worker you want to employ. You can buy the bond at any bank or insurance company, but what will be the best choice?
This article will help you understand security bond requirements by Ministry of Manpower (MOM) for foreign workers and how you can save money, time and hassle when purchasing security bond insurance.
What is a security bond
You need to place a $5,000 security bond for each non-Malaysian Work Permit holder you want to employ. The bond is in the form of a banker’s or insurance guarantee to support the security bond.
The bond is between you (the employer) and the Government of Singapore. It is used to ensure that both you and your workers comply with the conditions of theWork Permit. You cannot ask the worker to pay for the bond.
When to get the bond
You need to buy the bond before the worker arrives in Singapore.
When you buy the bond, the bank or insurance company will send the details electronically to Ministry of Manpower (MOM). If you wish to check the status of the bond, you can log in to WP Online.
MOM need to receive the details before your worker arrives. Otherwise, they will be refused entry and you will have to pay to send them home.
When will the bond be discharged
You will be discharged from the security bond liability for a worker only if you meet all of these conditions:
- You have cancelled the Work Permit.
- The worker has returned to home.
- You did not breach any of the conditions of the security bond.
When the bond will be forfeited
Your security bond may be forfeited if:
- You or your workers violate any of the conditions of the Work Permit or the security bond.
- You don’t pay their salaries on time.
- You fail to send them back when their Work Permits are expired, revoked or cancelled.
- Your worker goes missing. If a worker goes missing, half of the security bond ($2,500) will be forfeited if you have made reasonable effort to locate the worker and filed a police report.
You will not be liable for your workers’ violations (such as those relating to pregnancy) if you can prove that you have:
- Informed them of the Work Permit conditions they must comply with.
- Reported a violation when you first become aware of it.
Where can you buy security bond
As mentioned earlier, you can buy security bond from either a bank or insurance company. It makes little sense to buy from the bank as typically banks require you to put 100% cash collateral.
You can pay a premium to buy it from insurance company as long as you execute a counter indemnity form to the insurance company.
Most insurers require the original counter indemnity form to be signed and submitted every time before the bond is issued to you. This process can always be tedious and time consuming.
We are here to help!
As a specialized insurance broker for SMEs, we can obtain the best security bond quotations for you for all classes of foreign workers from China, India, Bangladesh, Thailand, Sri Lanka, Indonesia, Philippines.
Our advantages are
- We offer the most competitive premium
- We offer efficient Online Transmission so your worker can come in within two working days
- We offer master indemnity, so you don’t have to sign indemnity form for every worker. This reduces your administrative work drastically.