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The rising cost of getting a job as domestic helper

19 August 2018

By Leo A. Deocadiz

Every Sunday, foreign domestic workers flood into Hong Kong’s parks, foot bridges and other public places to spend their day, and a growing portion of their income, on local businesses.

Of grave concern, however, is that payment for loans and agency fees is biting off 35.6 per cent of that income, according to a survey on spending habits conducted by the Mission for Migrant Workers and Asia Pacific Mission for Migrants. And since Hong Kong limits agency fees to 10 per cent of the first month’s salary (or $441 of the minimum allowable wage of $4,410), much of these fees are illegal.

It was not this way in the past, when the MAW was even lower. The share of loans and agency fees in the 2017 survey is almost triple the 13.30 per cent share that this expense registered in a similar survey conducted by the two NGOs in 2013.

Spending one’s day off on a rainy day in Central.
These figures confirm another report by MFMW in April that showed about half of the helpers were charged HK$5,000 to HK$10,000 by employment agencies to find them employers. Some were even charged as much as HK$22,000. These amounts were set in loan agreements that were signed in the helpers’ home countries to avoid being penalized under Hong Kong’s law that limits the amount that employment agencies can charge.

“Agency fee and loan repayment constitute the chunk of this expense, showing still the prevalence of overcharging practice of agencies,” said the report which summarized the findings of the survey, conducted in the summer of 2017. “Especially that more than 50 per cent of FDWs are newly-arrived… it can be inferred that many FDWs are still paying the fees charged to them upon deployment to HK.”

It added: “Even loans can be attributed to agency problem as either they are forcibly made in order to get more from FDWs while circumventing the legal policy in place for agency fee, or they are made precisely because agency fee eats up most of their salary, leaving very little for their own needs in Hong Kong and remittance to family.”

It concluded that FDHs “continue to be exploited through debt bondage by agencies. Yet, the Hong Kong government does not actively work to alleviate this issue, allowing human trafficking and exploitation to happen.”

Despite the survey showing rampant overcharging, only three employment agencies have been prosecuted by the Employment Agencies Administration (EAA) and convicted of overcharging so far this year.

In the latest conviction on July 25, My Friends Service Limited (My Friend) located in Tsuen Wan was fined $8,000 at West Kowloon Magistrates’ Courts for overcharging a foreign domestic helper (FDH).  The other agencies convicted of overcharging this year were Quality Consultants Agency located in Tsim Sha Tsui and Familia Employment Agency located in Tai Po.

Migrants groups’ leaders display the breakdown of FDH spending: Dolores Balladares, chairperson of the United Filipinos in Hiong Kong; Cynthia Ca Abdon-Tellez, general manager iof the Mission for Migrant Workers; Ramon Bultron, managing directorof Asia Pacific Mission for Migrants (APMM); and Sringatin, chairperson of Indonesian Migrant Workers Union. 
A government spokesman said prosecution also depends on overcharged helpers filing complaints. EAA thus invites them to call 2115 3667, or visit its office at unit 906, 9/F, One Mong Kok Road Commercial Centre, 1 Mong Kok Road, Kowloon.

The survey also showed that the job placement expenses have led to the share of remittances — the main reason the FDWs have left their families back home — to shrink . The 2013 survey showed that remittances accounted for 50.68 per cent of their income. By 2017, its share had shrunk to 31.7 per cent.

“Agency fees are not only a problem for migrant workers but also for the Hong Kong economy,” the report said. “When more money is spent repaying loans, workers have less to spend on goods and services as well as remittance to support their families back home.”

The survey showed that of the minimum allowable wage of $4,410 every month, $2,600 remained in Hong Kong. With an FDH population of 351,513, this translates to $914 million they spent monthly in Hong Kong, or almost $11 billion every year.

Of the other expenses tracked by the survey, 9 per cent went to savings, 6 per cent went to food, 4 per cent went to clothes and accessories, 3 per cent to communications, 2 per cent to transportation, 2 per cent to toiletries, 1 per cent to donations and 5 per cent to other expenses.

So even if they may be earning one of the lowest wages in Hong Kong, foreign domestic helpers pour billions into its economy, nourishing businesses that have sprouted to cater to their needs, according to the survey.

This is contrary to popular belief that they are a burden to the economy. “Migrant domestic workers are integral to the consumer and service-based economy that is Hong Kong,” the two non-government organizations said in their survey report.

MFMW general manager Cynthia Abdon-Tellez affirmed: “Yes, foreign domestic helpers come to Hong Kong to support their families, but they end up spending most of their wages in Hong Kong, and thus contribute to the economic life of the city.” 

This is in addition to their other — and better-known – contribution: taking care of their employers’ children and homes, so that both parents can pursue their own careers and thus double their household income.

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