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SINGAPORE – For nearly two years, local muffin chain Twelve Cupcakes paid less than seven of its foreign employees, sometimes even taking half a worker’s salary.
On Thursday (December 10), the company pleaded guilty to 15 counts of underpaying employees in 2017 and 2018, a crime under the Foreign Labor Employment Act.
District Judge Adam Nakhoda will consider fourteen other similar charges during sentencing, which is expected to take place on January 7 next year.
Twelve Cupcakes was founded by radio DJ Daniel Ong and former model Jaime Teo in 2011 and acquired for $ 2.5 million by Kolkata-based Dhunseri Group in 2016.
Court documents establish that all seven employees were S-Pass holders at the time of the crimes. It is not indicated if they are still working for the company.
While their fixed monthly salaries ranged from $ 2,200 to $ 2,600, the company paid them between $ 1,400 and $ 2,050.
The court heard that Twelve Cupcakes underpaid six of the employees, who were in customer service and sales roles, their salaries from December 2016 to September 2018.
One of these six workers was also underpaid from the October and November 2018 wages.
The company also paid less than the fixed monthly salary from January 2017 to September 2018 due to the remaining employee, a pastry chef.
Court documents establish that Twelve Cupcakes had initially credited the reduced wages to employees’ bank accounts.
But then they changed tack, paying the workers their full salary from May 2018 onward, but then telling the employees that they had to return some of it to the company in cash.
Twelve Cupcakes had done it to hide a paper trail of their crimes, Labor Ministry prosecutor Maximilian Chew said, urging the court to impose a $ 127,000 fine.
He said Twelve Cupcakes would have continued to pay employees less if the crimes had not been discovered.
The prosecutor also said that Singapore relies heavily on foreign employees in many sectors, including the food and beverage industry.
Thus, there is a “huge public interest” in holding companies accountable for their well-being, including full and timely payment of their wages, he added.
Defense attorney Selvarajan Balamurugan said to mitigate that his client had fully reinstated the employees even before court proceedings began.
For every crime that involves paying its foreign employees less, a business can be fined up to $ 10,000.
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