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How to calculate your benefits

22 March 2019

By Cynthia Tellez

This is the monthly column from the Mission for Migrant Workers, an institution that has been serving the needs of migrant workers in Hong Kong for over 31 years. The Mission, headed by its general manager, Cynthia Tellez, assists migrant workers who are in distress, and  focuses its efforts on crisis intervention and prevention through migrant empowerment. Mission has its offices at St John’s Cathedral on Garden Road, Central, and may be reached through tel. 2522 8264.

Mathematics is seldom a favorite subject of Filipinos. But what we often overlook is that this part of our everyday life. Words like percentage, pro-rata, formula, etc tend to put many of us on guard because they sound far more difficult than the basic arithmetic of addition, subtraction, multiplication and division.

But to many of us here, especially migrant domestic workers, there is a need to relearn these mathematical skills because we need them in computing wages, benefits, loans, personal insurance, investments, savings, name it, they all require these. So instead of hating these computing skills, we should start reviewing what we learned from our high school and college math subjects and focus on those that are applicable to our present condition. Love it, practice it, live it.

One of the most common words that you will see in the provisions regarding salaries and more so with regards to workers benefits is the word “pro-rata”. This means “in proportion of”, or of determining a proportionate allocation to parts of a whole. It is used when determining the number of days one is entitled to, for example, on the number of annual leave days.

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Let us take a look at Annual Leave Pay as an example. A worker is entitled to this pay depending on the number of years he or she has continuously worked with an employer. This entitlement is based on the contract (Employment Ordinance Cap 57). Obviously, annual leave pay is earned every year. But we have to know that to be legally entitled to this pay, a worker must have worked continuously to have worked for an employer for no less than three months. Thus, if you are on a two-year contract and the said contract is prematurely-terminated after two months or even two and a half months, you are still not entitled to annual leave pay. But say you have worked for nine (9) months and the employment contract is terminated for whatever reason, you are entitled to a pro rata annual leave pay. So if in your first year of employment you are entitled to seven days of paid annual leave, you will have to compute how many days then you are entitled for 8 months:

- divide 9 months by 12 months and multiply the result by 7days: you get the number of days of annual leave pay that you are entitled to. Then you multiply that with your daily wage.

To illustrate:
9 months /  12 months =  .75 days  x  7days = 5.25 days x $148.60 = $780.15

We then go look into how much should be your daily wage.

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In many instances, the computation that employers follow, as taught by placement agencies, is to simply divide the monthly wage by either 30 days or 31 days or 28 days depending on how many days there are in the month you are claiming pay for. For example, you are claiming for unpaid statutory holiday for January 1st, when your employer asked you not to go out and help prepare for a New Year’s party. Your tendency is to divide your monthly wage by 31 (as there are 31 days in January). That is wrong. The contract of migrant domestic workers (or foreign domestic helpers) is a month-by -month contract for a maximum of two years and therefore if you are a migrant domestic worker, you are a monthly wager.  You are not a daily wager.

Daily wage of a monthly wager therefore is computed this way:
- multiply your monthly wage by 12 to get one year’s total wage and divide it by 365 days to get your day’s wage.

To illustrate: HK$4,520  x  12months = HK$ 54,240  /  365 days  =  HK$148.60

This computation should be followed. You have to insist on this formula.

This brings us to another computation that is usually a concern of those who have worked in a continuous contract, meaning with the same employer, for more than five years and the employer terminates the contract or the employer refuses to sign a new contract. This is the Long Service Pay (LSP).

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Take note that the only time you are entitled to LSP is when it is the employer who terminates the contract that has run for 5 years or more, unless you have a medical certificate stating that you are “UNFIT to work” or that you have reached 65 years of age, the legal retirement age in Hong Kong.

The computation for LSP also depends on your last month’s salary:

Get the two-thirds of that last month’s salary by multiplying the salary by two and divide the result by three. The answer is the equivalent of 2/3 of your monthly salary. Multiply that by the number of years of service with the employer. If you have worked for six years, multiply the answer by 6.

To illustrate:
    HK$4,520 x 2 / 3 =           $ 3,013.33    x                                     6 years = HK$18,080
(Monthly Wage)           (2/3 of a Month’s Wage)     (Your LSP for Six Years)

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If you have worked, for example, for six years and seven months, first, do the pro rata computation of the seven months’ equivalent in a year.
- 12-month is equal to one year; 
- 7-month divided by 12-month equals .58 year
So 6 years +.58 year = 6.58 years
HK$ 4,520   x   2/3 =             $3,013.33 x                        6.58 =  HK$19,828
(Monthly Wage) (2/3 of a Month’s Wage)   (Your LSP for Six Years & 7 Months)

The same computation is applied to Severance Payment. The same requirements apply, that it is the employer who terminated the contract and is not anymore hiring anyone to do the same job that you do. If you have worked for them for two years or more, then you are entitled to severance pay. The same computation as above applies.

For any clarifications, you may call 2522-8264 or visit the Mission For Migrant Workers, an outreach ministry of St. John’s Cathedral, at 4-8 garden Road, Central, Hong Kong.

It pays to know your rights and responsibilities.


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