milaconnect
Placement fees
Every year, more and more migrant workers come to Hong Kong to work as Foreign Domestic Helpers. They come from neighboring countries, including Indonesia, the Philippines, Thailand, Vietnam, India, Pakistan, Nepal, and many more. In 2013, there were about 320,000 Foreign Domestic Helpers in Hong Kong: about 48% of this population is from the Philippines, 49.4% from Indonesia and 1% from Thailand. With a growing population, this population makes up 5% of Hong Kong's total population. Recruitment agencies from Hong Kong, the Philippines and Indonesia exploit the vulnerability of these Foreign Domestic Workers have as they venture into a new environment seeking a better job and a better life for their family.
Figure 1: Collage of advertisements on a wall of a commercial centre in Causeway Bay.
A hidden issue many Foreign Domestic Helpers are unaware of is illegal agency placement fees.
This relatively large population's impact on local shops is not to be undermined. Many local businesses target Foreign Domestic Helpers, as seen in Figures 2 and 3. Locations of these businesses show a trend, having a close proximity to common areas for Foreign Domestic Helpers. The businesses shown in the photos are situated in Causeway Bay, close to Victoria Park where hundreds of Foreign Domestic Helpers gather.
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Employment agencies in Hong Kong are only permitted to charge each Foreign Domestic Helper 10% of their first month's wage.
In Part 7 of the Employment Ordinance and the Employment Agency Regulations in Chapter 57 of the Subsidiary Legislation, the maximum commission employment agencies in Hong Kong are permitted to charge a Foreign Domestic Helper is 10% of their first month's wage. This may only be collected by the agency after the Foreign Domestic Helper has been successfully placed with her employer and have received her first month’s wage.
However, Foreign Domestic Helpers have been exploited by recruitment agencies. On October 29th, Artellect Limited, a domestic worker recruitment agency located in Tuen Mun, was fined 45,000 HKD for collecting excessive placement fees from foreign domestic workers. Recruitment agencies are required to comply with the law, and not collect any extra placement fees from foreign domestic workers other than the prescribed commission. Even though there are dozens, if not hundreds of recruitment agencies located all over Hong Kong, certainly not every agency is involved in such illicit activities. However, there are those that have gone under the radar.
According to HELP for Domestic Workers, In 2006, a Reform Package affecting Household Service Workers was implemented by the Philippine Overseas Employment Administration, stating that employment agencies in Philippine are not permitted to charge placement fees to workers bound for Hong Kong.
Figure 2: Indonesian phone shop close to Victoria Park
Figure 3: Several Indonesian shops provide services such as money exchanges and convenience stores.
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However, many employment agencies of the Philippines have charged 150,000 Pesos or about 25,000 HKD to overseas workers bound for Hong Kong. These agencies tend to target desperate job applicants and this causes the workers to not insist on receiving a receipt for their payment in fear of the termination of their employment, as a result, these illegal practices go away unnoticed. Lending institutions for these workers may collude with these agencies for profit, leading to little to no paperwork of placement fees for these overseas workers.
For Indonesia, the maximum placement fee for Domestic Helpers amounts to 15,000 HKD. This includes training fees, service fees and other expenses for processing a worker’s visa to Hong Kong.
However, similar to the Philippines, this policy of maximum commission is not enforced and regulated appropriately and this resulted in many Indonesians paying about 21,000 HKD. Though this information may not be officially confirmed, about 80% is divided between the Hong Kong and Indonesian agencies that colluded along with the rest going to lending institutions.