Key Takeaways:

• Employers must provide a S$5,000 security bond per non-Malaysian worker, which must be arranged before their arrival.
• Employers are responsible for paying salaries promptly, providing safe housing, covering medical expenses, and reimbursing repatriation costs upon the end of employment. They must also notify MOM of changes, such as permit cancellations or a worker’s departure, within seven days.
• The bond is forfeited if the obligations are not met and is released once all conditions are fulfilled.
• Insurance alternatives, such as a Foreign Worker Security Bond, help free up cash flow while meeting MOM rules.

Introduction

Hiring non-Malaysian workers in Singapore comes with certain responsibilities, one of which is providing a security bond for foreign workers. This bond, set at S$5,000 per worker, acts as a guarantee to the Ministry of Manpower that employers will meet their obligations. These obligations include paying wages on time, providing safe accommodation, covering medical expenses, and arranging repatriation upon the end of employment.

In this article, we explain how the bond works, what could lead to forfeiture, and when it is discharged. We also explore practical alternatives that can ease financial pressure and highlight related protections that strengthen both compliance and worker well-being.

What Is the Security Bond for Foreign Workers?

The security bond for foreign workers is a S$5,000 financial guarantee paid to Singapore’s Ministry of Manpower (MOM). It applies to all non-Malaysian Work Permit holders and must be arranged before the worker enters Singapore. Importantly, employers are not allowed to recover this cost from their employees.

At its core, the bond is part of MOM’s security requirements, ensuring that employers honour their obligations, such as providing fair wages, proper housing, medical support, and ensuring safe repatriation. It functions as both a compliance measure and a safeguard, reflecting your responsibility for your workers’ welfare and legal commitments.

Employer Responsibilities Under the Bond

Employers who provide a security bond for their foreign workers are expected to meet core duties throughout the employment period. This includes paying salaries on time, offering safe and decent housing, and ensuring access to medical treatment when needed. The employer must also bear repatriation costs upon the termination of the employment contract. Many companies opt to extend protection with Income Insurance’s Group Hospital and Surgical Insurance, which exceeds the minimum requirements and helps alleviate concerns about unexpected medical bills.

Reporting and Record-Keeping

Another key duty is to notify MOM within seven days whenever employment ends or a Work Permit is cancelled. Missing these deadlines can place the bond at risk. Setting up automated reminders or using digital checklists is a practical way to avoid administrative lapses and maintain compliance.

When Bonds Are Forfeited or Released

The MOM may enforce bond forfeiture conditions if an employer fails to meet obligations, such as not paying wages or neglecting repatriation. On the other hand, when all requirements are fulfilled, the bond is usually released about a week after the worker has returned home. Understanding both outcomes helps employers plan ahead and manage responsibilities with confidence.

Insurance Alternatives to Cash Bonds

Instead of locking up cash with MOM, employers can opt for security bond insurance, also known as Foreign Worker Security Bond. In this arrangement, you pay a premium and the insurer provides the guarantee directly to MOM on your behalf. This enables businesses to comply with legal requirements while maintaining valuable working capital for daily operations and future growth.

Benefits for Employers

Choosing insurance over a cash bond can ease financial pressure and simplify compliance. It supports healthier cash flow, reduces the paperwork involved in bond management, and often speeds up the approval process. Some insurers also bundle bond coverage with medical or workplace injury protection, giving employers the convenience of handling multiple requirements through a single plan.

Related Medical and Insurance Compliance

The security bond is only one part of an employer’s obligations. Every worker must also be covered by foreign worker medical insurance of at least S$60,000 per year to meet MOM requirements. In many sectors, Work Injury Compensation Insurance is compulsory too, providing protection in the event of workplace accidents.

Together, these policies form a baseline safety net that safeguards both employers and workers, ensuring compliance while giving employees confidence that their essential needs are protected.

Conclusion

The security bond for foreign workers is not simply a formality. It plays a vital role in ensuring that employers meet their responsibilities while providing workers with fair treatment and protection. By understanding how the bond works and exploring alternatives, such as insurance guarantees, businesses can alleviate financial pressure and operate with confidence.

If you are looking for guidance on managing these obligations, speak with an Income advisor today to explore solutions that support both your business and your workforce.