Placement Fees
Every year, Hong Kong receives more and more migrant workers as Foreign Domestic Helpers from neighboring countries such as Thailand, Indonesia, India and Philippines. In 2013, there were about 320,000 Foreign Domestic Helpers in Hong Kong, with 48% of this populace coming from Philippines and 49.4% coming from Indonesia while 1% came from Thailand. With a growing population, constituting almost 5% of Hong Kong's total population, recruitment agencies from Hong Kong, Philippines and Indonesia exploit the vulnerability of these Foreign Domestic Workers.
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 the photos are situated in Causeway Bay, close to Victoria Park where hundreds of Foreign Domestic Helpers gather.
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 one’s 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 law, and not collect any extra placement fees from foreign domestic workers other than the prescribed commission.
According to Helpers for Domestic Helpers, 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.
However, many employment agencies of Philippine 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, alike 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.
Figure 1: Collage of advertisements on right side of wall of a commercial centre in Causeway Bay.
Figure 2: Photo of Indonesian phone shop situated close to Victoria Park in Causeway Bay.
Figure 3: Photo of several Indonesian shops that include restaurant, money exchanges and stores.
Figure 4: Photo of an employment agency advertising in a commercial centre in Causeway Bay.
Figure 4: Photo of an ABNC employment agency advertising in a commercial centre in Causeway Bay.