Papsma president Kris Foo said that Section 25 of the Employment Act gives employers the option to make payments via methods recognised under the law.

“Papsma disagrees with CLAB compelling employers to use their system because they have the option to use payment methods approved and recognised under Section 25 of the act,” he told FMT.

Section 25 provides that wages may be paid through accounts opened with financial institutions registered under the Financial Services Act, the Islamic Financial Services Act, or the Development Financial Institutions Act.

The section also allows wages to be paid in cash or by cheque upon written request from the employee, with the approval of the labour department.

The human resources ministry may also prescribe other methods for the payment of wages under Section 25.

“We urge the government to review CLAB’s rule, which has overridden the minister’s authority,” said Foo.

According to him, CLAB issued a notice to employers to use its e-wages service starting January this year.

Foo said those who failed to use the e-wages system risked being blacklisted by CLAB, meaning that these companies would not be able to renew employees’ permits in the future.

CLAB was set up in 2003 pursuant to a decision by the Cabinet’s committee on foreign recruitment to facilitate bringing in workers for the construction sector. In 2017, CLAB became a subsidiary of the Construction Industry Development Board.

FMT has reached out to CLAB, which declined to comment.