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Employment Agency Security Bond in Singapore

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Calculate your Employment Agency Security Bond cost:

An Employment Agency (EA) Security Bond is a mandatory bond required by MOM to set up your agency.

Are you planning to set up an Employment Agency? Provide offers you the quickest & easiest way to get your Employment Agency Security Bond. We’ll have your bond issued in the form of a Banker’s Guarantee, and it will comply with MOM’s requirements. Once you get your bond issued, you’ll be running your new agency in no time at all. It’s fast, affordable, & simple with Provide.

What is an Employment Agency Security Bond, and what does it cover?

Employment Agency Bonds help to ensure that employment agency owners abide by MOM regulations. The bond will provide coverage if you default on the Employment Agency license conditions set forth by MOM. 

Bonds are a type of security insurance policy that help to replace cash collateral. By purchasing a bond, you don’t have to provide the money upfront as cash. Instead, the insurance company will guaranteee the bond amount. This frees up cash flow for your business. 

Will this bond be issued in the form of a Banker's Guarantee?

Yes. MOM requires Employment Agency bonds to be issued in the form of a Banker’s Guarantee (BG). The bonds you receive will be issued in this format, and will comply with MOM’s requirements.

What is the Employment Agency Security Bond amount I need?

The bond amount that you need depends on i) the type of employment agency license that you are applying for, ii) your demerit points, and iii) how many foreign workers you place (for comprehensive licenses). There are two types of employment agencies that MOM licenses.

1. Select License: $20,000 to $60,000 bond required

Select License Applicant Criteria

Employment Agency Bond Amount Required

New Select License, with 0 demerit points in the last 12 months

$20,000

Has 3-7 demerit points in the last 12 months

$40,000

Has 8 or more demerit points in the last 12 months

$60,000

2. Comprehensive License: $60,000 bond for new set-ups, $20,000 to $60,000 bond for companies over 1 year old

Comprehensive License Applicant Criteria

Employment Agency Bond Amount Required

New Comprehensive License (new company, with under 1 year of operating history)

$60,000

3 or less demerit points in last 12 months

Placed under 200 Work Permit & S-Pass workers in last 12 months

$20,000

4-7 demerit points in last 12 months

Placed 200 or more Work Permit & S-Pass workers in last 12 months

$40,000

3 or less demerit points in last 12 months

Placed under 200 Work Permit & S-Pass workers in last 12 months

$40,000

4-7 demerit points in last 12 months

Placed 200 or more Work Permit and S-Pass workers in last 12 months

$60,000

8 or more demerit points in last 12 months, regardless of number of workers placed

$60,000

Can foreigners purchase an Employment Agency Security Bond?

You must be a Singapore Citizen or Permanent Resident (PR) in order to apply for the bond, and to own an Employment Agency. Your birth country doesn’t matter as long as you’re a PR or Citizen.

When should I purchase the bond?

You must provide MOM with your approved bond within 4 weeks of receiving your IPA (In-Principle Approval).

If you don’t manage to provide the bond within this timeframe, your application will be invalidated, and you will have to re-apply. This includes paying the $400 application fee again. It is therefore crucial that you purchase the bond early, to avoid delays that jeopardise your employment agency application.

 Purchasing your Employment Agency Bond early will save you a great deal of trouble and cash!

What actions can cause the bond to be forfeited?

It’s important that you comply with MOM’s regulations on maintaining your Employment Agency license. Otherwise, MOM may forfeit your bond. There may also be other penalties involved for employers who breach their EA license terms.

Your bond may be forfeited if:

  • You violate any conditions of your employment agency license, or any part of the Employment Agency Act
  • You violate any conditions of the Employment Agency Security Bond
  • You pay your workers’ salaries late, or withhold worker salaries, or abuse workers
  • You don’t repatriate your foreign workers to their home country when their Work Permit has expired
  • You commit a criminal offence

You can accumulate demerit points if you don’t comply with licensing requirements. If you have enough demerit points, your Employment Agency bond will be forfeited. Here is a brief list of key terms that you should comply with:

  • Cannot post discriminatory job advertisements, or refer employees using discriminatory methods
  • Endeavour, with reasonable effort, to place Singaporeans for job orders
  • Cannot disclose private information about employees to third-parties, without seeking employees’ consent
  • Take all reasonable actions to ensure that all staff comply with licensing requirements 
To prevent your bond – which can be quite a large amount – from being forfeited, employment agency owners should familiarise themselves thoroughly with MOM’s licensing requirements.

How does a claim on an Employment Agency Security Bond work?

Like all bonds, Employment Agency Security Bonds contain a clause called “Counter Indemnity”. Counter Indemnity means that you must reimburse the insurance company if your bond is forfeited. This prevents employment agencies from ignoring regulations, by forcing them to have skin in the game.

If you violate the terms of your employment agency license, MOM may suspend your license. If your license gets suspended, your bond will be forfeited. Once your bond becomes forfeited, the insurance company will first pay the bond amount ($20,000 to $60,000) to MOM. After the insurance company pays the bond amount to MOM, the insurer will then recover this sum from you, under the Counter Indemnity clause.

When will my Employment Agency Security Bond be discharged?

Your Employment Bond will only be discharged 6 months after your employment agency license expires. This ensures that employment agency owners will make good on all necessary salary payments to the workers they have hired.

If you deposited a cash collateral for the bond with your bank or insurer, you will receive your deposit back after the bond has been discharged.

What other insurance should I have, besides the Employment Agency bond?

You must purchase Foreign Worker Medical Insurance for all S-Pass and Work Permit holders. This insurance must have a minimum cover amount of $15,000. Foreign Worker Medical Insurance covers:

  • Hospitalisation and Surgery

You must also have a Foreign Worker Security Bond for all Work-Permit and S-Pass holders.

If you are hiring a worker who earns <$2,600/month, OR who performs manual work, you must also purchase Workman Compensation Insurance (WICA Insurance).

Some typical examples of manual work can include:

  • Chef, kitchen assistants, dishwashers F&B service staff
  • Cleaners
  • Construction labourers, interior renovation workers
  • Manufacturing manual workers
  • Drivers, goods packers
  • Electrical workers, manual technicians, engineering workers, off-shore workers

Is cash collateral required when purchasing the bond?

The necessity of cash collateral depends on a few key factors:

  1. Age of company
  2. Nationality make-up of company directors

Typically, companies with at least 1 Singaporean director, and a couple years of operating history, don’t need to post any cash collateral. Having to post cash collaterals are a real drain on a company’s resources. We’ve helped numerous companies achieve 0% cash collateral, which is why many SMEs come to us to get their Employment Agency Bonds.

How much do Employment Agency Bonds cost?

Employment Agency Bonds are highly affordable, with premiums starting from $900 onwards.

This is a one-time premium (it’s not charged annually) and will provide coverage for the entire duration of the bond.

Provide is the best place to get your Employment Agency Bonds. We help you save up to 25%, and can get you bonds in a quick and hassle-free manner.

Get your Employment Agency Security Bond, starting from just $899. Speak with us today!

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