A story was shared on Reddit Singapore, the thread described how her aunt had encountered an unfortunate incident with a company that is using dirty tactics to pay their staff lower overtime wage.
Here is the story
My unemployed aunt recently found a hiring ad online, its a “packer” job in a food processing factory, so she applied for it since its CB period now, and many companies have stopped hiring for the moment.
The ad promised a salary of 1.7k excluding OT and other allowances. 1.7k for a factory job, why not?
After my aunt was offered, she was told that the 1.7k consisted of $700 Basic Salary + $1k “Fixed Allowance”. We were quite perplexed as to why they’d want to divide the salary into two different components.
Turns out, this is a very smart tactic used to cut down on OT cost. I did some math, and here’s what I found
When your basic is 1.7, your hourly rate is $8.9, so OT rate at 1.5 times is arnd 13.35.
But when you break it down into 700 + 1000, your hourly rate is based on the 700 basic. So in this case the OT rate at 1.5x became 5.5 dollars per hour!
Then when you OT a lot, the difference adds up. So if you OT 30 hours in that month, using 1.7k base will give you 2.1k+ before CPF per month. But when you use 700 base, it gives only 1.8k… a difference of almost 300 dollars!
In the end, we advised her against taking up the offer and got her to try others. To me, this is just too smart.