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HK Magazine Archive

Helping Hands: Illegal Agency Fees

Foreign domestic workers are an essential part of many Hongkongers’ lives. But are they welcomed by the city? Adrienne Chum investigates the agency fees.

PUBLISHED : Thursday, 30 July, 2015, 4:00pm
UPDATED : Wednesday, 19 October, 2016, 4:47pm

“My agency required me to take a training course, which cost 30,000 pesos ($5,151), then go for a medical exam for 5,000 pesos ($858) and pay other fees like the Overseas Employment Certificate and Social Security System: I paid a total of 56,000 pesos ($9,615) before coming to Hong Kong.”
– Arlene, 35, domestic helper for 3 years.

“My monthly salary was $4,010. My agency fee was about $7,000. I paid $3,000 to the agency before coming, and the lending company took $2,100 a month for three months.”
– Redem, mid 30s, domestic helper for 18 years.

The Problem:

Many agencies charge Foreign Domestic Workers additional, illegal fees to find an employer.

Why’s it happening?

According to The Labour Department, the fee an agency charges to place a worker should not exceed 10 percent of a their monthly salary. The minimum monthly salary for a foreign domestic worker is currently $4,110, which means that the fee should be no more than $411 for a minimum-wage worker.

However, many agencies find loopholes by establishing “mandatory” services and facilities that their clients must pay for, including training fees. Take Arlene for example: “I had to pay 5,000 pesos to the clinic, but that clinic is connected to the agency. Everything is connected to the agency; they just don’t want to [appear to] receive the money,” she says. “When I came to Hong Kong, they gave us a waiver to sign saying that they didn’t collect a cent from us.”

The Mission for Migrant Workers is a charity which provides help to helpers in distress. It says that the FDWs it works with have reported widespread agency malpractice in Hong Kong, with 50 agencies on record charging more than $15,000 in fees. Less than 3 percent of MFMW’s clients have reported fees at or below the legal limit.

Often agency fees must be paid by both the employer and the FDW, but it’s often unfairly skewed. Victoria Cabantac, a volunteer at the Mission for Migrant Workers, gives the example of the “warranty” system which she calls “buy one, get five.” Warranties are an easy way for agencies to make money: An employer only needs to pay a one-time agency fee, and if the helper’s contract is terminated within a given time period then the agency guarantees a replacement for free. But the replacement still has to pay their agency fees, so the agency is able to collect multiple fees in a short period of time for a single client.

Arlene’s case is a classic example of a “warranty”: She was told that she would be the fourth helper in the house, but when she arrived, there was only one other helper living with the family, as the other two helpers’ contracts had been terminated. The remaining helper was let go shortly afterwards. Three and a half months later, Arlene’s contract was also terminated.

After talking to other domestic helpers in the Bethune House shelter, Arlene realized that she had been overcharged by her agency. She filed a complaint with the Philippine consulate. After some deliberation with both Arlene and the agency, the consulate maintained that her training fee had to be paid, as the certificate she was awarded could be used repeatedly. In the end, the consulate ordered the agency to repay Arlene $4,300.

What You Can Do

Many employers turn a blind eye to these agency issues. But if you want to help, make sure you read all the contracts involved. Look out for exorbitant fees that add up to more than 10 percent of your worker’s monthly wage. In order to pay these fees, some helpers resort to taking out loans from high-interest lenders, or having to give their entire salary to the agency for the first few months. You can also ask your helper directly about her employment agency and consult the Labour Department if there is a problem. Not sure where to start? Contact an NGO like those listed here.

 

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