The Law Versus Reality

In recent years, exploitation by employment agencies has been one of the major issues faced by foreign domestic workers. Our extensive experience on the issue, particularly with respect to Filipino workers, has given us a deeper insight of how employment agencies work, their modus operandi and their motivations. Since the majority of HELP clients are from the Philippines and Indonesia, we will focus on the relevant laws on agency fees in these countries and in Hong Kong.

Hong Kong

According to Part XII of the Employment Ordinance and the Employment Agency Regulations (Chapter 57, subsidiary legislation), the maximum commission employment agencies in Hong Kong are permitted to charge you as a job applicant is an amount not exceeding 10% of your first month’s wages. This may only be collected by the agency after you have been successfully placed and you have received your first month’s wages. So if your monthly salary is $4,310, a Hong Kong agency must not charge you more than $431 for finding you an employer.  If an agency charges you more than that amount, then that agency is breaking the law.

Expenses for processing your employment contract and entry to Hong Kong (such as medical examination, consulate fee, visa fee, insurance fee and air fare from your place of origin to Hong Kong) must be paid by the employer (see clause 8 of the standard domestic worker employment contract).

 

Philippines

The Philippine Overseas Employment Administration (POEA) implemented a Reform Package in 2006 affecting Household Service Workers (HSW). Under the new guideline, employment agencies in the Philippines are not permitted to charge placement fees to overseas workers bound for Hong Kong. They may charge for training, medical examination, photo, video and other necessary miscellaneous expenses but not placement fee. However, many agencies charge a placement fee of up to 150,000 Pesos for deploying a domestic worker to Hong Kong.  They get away with this illegal practice by preying on desperate job applicants who would not insist on being issued a receipt for their payment for fear that should they request one they will not be deployed. These employment agencies also collude with lending institutions that deal primarily with overseas workers to finance and cover up these illegal placement fees. As a result, there are rarely any paper trails that can prove that a worker has paid a placement fee.

In addition to this, under the Philippine Republic Act No.10022, it is unlawful for agencies in the Philippines to impose a compulsory and exclusive arrangement whereby an overseas Filipino worker (OFW) is required to undergo training or medical assessment only from institutions specifically designated by the agencies.  Most domestic workers who come to HELP for advice have been required to undergo training in specific institutions that appear to be connected to their recruitment agency. Some of these agencies charge grossly excessive training fees and for so called “internet launch” and” internet success” in order to disguise placement fees. They also require OFWs to pay for jackets or T-shirts with the agency logos and workers are required to wear them when they fly to Hong Kong. These are unnecessary expenses designed to maximize the profit of the agency at the workers’ expense.

Indonesia

Under a decree (KEP.186/PPTK/VII/2008) dated 10 July 2008 of the Director General for Training and Placement of Manpower, the cost structure for placement of IDW to Hong Kong was set at Rp. 15,550,000 at a fixed exchange rate of HK$1 to Rp. 1,000, or HK$15,550. This includes training fees, service fees and other expenses for processing a worker’s visa to Hong Kong.

However, as with the Philippines, the law in Indonesia has not been strictly implemented. Indonesians are normally required  to pay $21,000 for obtaining a job as a domestic worker in Hong Kong. Though it is not officially acknowledged, research revealed that of the total fee, $18,000 is divided between the Hong Kong and Indonesian agencies and the remaining $3,000 goes to the lending company that collects the payment.

 Agency Regulations by Country

Country Maximum placement fee/ agency commission
Hong Kong 10% of a job applicant’s first month’s salary
Philippines $0 placement fee
Indonesia $15,550

Additional Resources for Domestic Workers

Understanding Your Contract