Uninsured against cheats
It has been in effect for only a few weeks, but a new insurance requirement imposed by the Philippine government on domestic workers hired to work abroad has already hit trouble.
According to the new law, when a helper is hired through a Philippine or Hong Kong agency, the employer or agency has to pay a one-off insurance premium of US$144 to the Philippine government.
The system took effect on November 8 and only covers first-time hires employed through authorised agencies. Current contracts will not be affected.
Yet some employment agencies in the Philippines are making domestic helpers pay the new insurance premium themselves. As a result, some domestic helpers might decide not to work abroad.
'We have heard a few reports that this has been happening and it should not be because it is against the law in the Philippines,' said Holly Allan, manager for Helpers for Domestic Helpers, a St John's Cathedral pastoral outreach catering to the needs of Hong Kong's foreign domestic helper community.
'Agencies in the Philippines are definitely doing this. This insurance has to be paid there before domestic helpers can come to Hong Kong. It's too early to say how many agencies are making domestic helpers pay this fee themselves, but I'd suspect there would be many,' she added.
The new insurance policy may also deter some employers from hiring helpers. They may be unwilling to pay both the new Philippine insurance fee and the Hong Kong equivalent.
In Hong Kong, the employees' compensation policy, which includes medical coverage, costs HK$1,350 over two years.
It is illegal for employment agencies in the Philippines to charge domestic helpers placement fees to get jobs abroad, but many of them ignore this. 'Domestic helpers in the Philippines are desperate for jobs abroad, but many will not get the opportunity unless they pay this placement fee,' Allan said.
Employment agencies in both the Philippines and Hong Kong charge a placement fee as some domestic helpers will apply directly through an agency in Hong Kong. Agencies in Hong Kong are only supposed to charge a maximum of 10 per cent of the first month's salary, Allan explained. Yet many charge up to HK$10,000, or even more.
'When you consider that as well as this placement fee, domestic helpers are now having to pay for an insurance policy of US$144, it's not very fair. It is illegal for employment agencies to do this,' Allan said.
One way around this is for domestic helpers to keep the documents or receipts they are given after paying these fees. They then can try to get them reimbursed later by the Philippines government via the Philippine Overseas Employment Administration. But this can be a long process.
Yet the new insurance policy also has some advantages. It will provide more protection for helpers.
The new policy will cover subsistence allowance for domestic helpers in between jobs in Hong Kong.
These stories are edited versions of articles published in the South China Morning Post on December 5, 2010