RESEARCH REPORT Recruitment Costs – Hong Kong, April 2016 Page 1 of 16 Recruitment Costs Brief: Hong Kong David Dickinson April 2016 Foreign Domestic Workers (FDW) make up by far the majority of semi-skilled foreign workers in Hong Kong. FDW and employment agencies are respectively regulated under the Employment Ordinance (Cap. 57) and the Employment Agency Regulations (Cap. 57A) ("EAR"). Agents must be licenced, and can only accept fees of up to 10% of the FDW’s first month of salary, though other “costs” are passed to some FDW, sometimes illegally. There are no controls on amounts paid to origin country agents (even if in excess of their legal limits), or the participation of HK agents in arrangements for FDWs to make such payments when working in Hong Kong. In recent years there has been considerable publicity and research surrounding the prevalence of high placement fees and NGOs, unions and advocates have been calling for reforms in this area. Recently the Hong Kong Government announced reforms in the areas of education and collaboration with FDWs’ countries of origin and released a Draft Code of Practice for agents. No regulatory changes are proposed. Background Hong Kong has a total population of about 7.3 million (mid-2015) and a labour force of about 3.9 million (August 2015). Like Singapore, Hong Kong imports low-wage foreign “guest” workers, though most work as domestic workers. Relatively few semi-skilled and unskilled foreign guest workers are employed by industry.
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RESEARCH REPORT
Recruitment Costs – Hong Kong, April 2016 Page 1 of 16
Recruitment Costs Brief: Hong Kong
David Dickinson
April 2016
Foreign Domestic Workers (FDW) make up by far the majority of semi-skilled foreign workers
in Hong Kong. FDW and employment agencies are respectively regulated under the
Employment Ordinance (Cap. 57) and the Employment Agency Regulations (Cap. 57A)
("EAR"). Agents must be licenced, and can only accept fees of up to 10% of the FDW’s first
month of salary, though other “costs” are passed to some FDW, sometimes illegally. There
are no controls on amounts paid to origin country agents (even if in excess of their legal
limits), or the participation of HK agents in arrangements for FDWs to make such payments
when working in Hong Kong. In recent years there has been considerable publicity and
research surrounding the prevalence of high placement fees and NGOs, unions and
advocates have been calling for reforms in this area. Recently the Hong Kong Government
announced reforms in the areas of education and collaboration with FDWs’ countries of
origin and released a Draft Code of Practice for agents. No regulatory changes are proposed.
Background
Hong Kong has a total population of about 7.3 million (mid-2015) and a labour force of about 3.9 million
(August 2015). Like Singapore, Hong Kong imports low-wage foreign “guest” workers, though most work
as domestic workers. Relatively few semi-skilled and unskilled foreign guest workers are employed by
industry.
RESEARCH REPORT
Recruitment Costs – Hong Kong, April 2016 Page 2 of 16
The external supply of labour in Hong Kong occurs in several ways. The Immigration Department1,2 of the
Hong Kong Special Administrative Region Government (HKSARG) administers a range of visas and entry
permits for foreigners to work, establish or join in a business, and take up residence. Here are described
two schemes for lesser skilled groups who are the primary focus of this Brief. Other Schemes for
professional and high-net worth individuals and their families are summarised in Attachment 1.
Migrant Employee Schemes.
1. The Supplementary Labour Scheme (SLS) handles applications for the recruitment of labour at
technician level or below. It is administered by the Labour Department and allows employers with
genuine difficulties in finding suitable employees locally to bring in workers from outside the
HKSAR. Under the scheme the terms of employment need to be comparable to those in the local
market and the employer must be capable of providing suitable accommodation, and guarantee
maintenance and repatriation upon termination of contract. The numbers employed under this
scheme have been relatively few, with 2,415 approvals in 2012, due in part to strong resistance
from unions, though the Government rolled out measures to enhance the Scheme in 2014 for public
sector works projects due to acute labour shortages in the construction industry.
2. Foreign Domestic Workers (FDWs) As of the end of 2013 there were 321,000 foreign domestic
workers employed in HKSAR3, of which 98% were from the Philippines or Indonesia. The Scheme is
a long-standing one that has been in place since the 1970s. The FDW population is by far the largest
“low-skilled” foreign worker population group, in HKSAR, excluding migrants from mainland China.
1 Immigration Department. (2015, 29 Sept.). “Hong Kong the Facts”, Sept 2015.
http://www.gov.hk/en/about/abouthk/factsheets/docs/immigration.pdf 2Immigration Department. (2015, 29 Sept.). “Immigration Guidelines for Entry to the Hong Kong Special
Administrative Region of the People's Republic of China”.
http://www.immd.gov.hk/eng/services/visas/immigration-entry-guideline.html 3 Hong Kong Annual Digest of Statistics, 2014. Table 2.12 Numbers of Foreign Domestic Helpers, Page 43.
RESEARCH REPORT
Recruitment Costs – Hong Kong, April 2016 Page 3 of 16
Legislation and Policies Covering Placement Fees
Hong Kong
According to some academic NGO studies4,5 Hong Kong offers some of the best terms and conditions for
FDWs. Employment is based on Standard-form contracts and is subject to a number of minimum terms
and conditions. FDWs are entitled to a rest day of 24 hours’ duration in every seven day period, statutory
holidays, leave, adequate food or a food allowance, the cost of travel to the place of origin upon
termination of the contract and limits on the deductions that can lawfully be made from a salary.
There is a minimum wage known as the 'Minimum Allowable Wage” or MAW which stipulates that foreign
domestic workers in Hong Kong must be paid at least at this level. The MAW is periodically adjusted and
was HK$4,210 per month as at 1 October 2015.
As in Singapore there are rules prohibiting working in commercial or domestic premises other than the
employer’s residence. Each contract is for a two-year period and without any probationary period. Early
termination of the contract is possible at the initiative of either party and with a month's notice.
While agencies6 may charge commissions to the incoming FDW, they must not exceed 10% of the first
month's wages received after being successfully placed in a job. Most expenses or costs such as visa
applications cannot be passed to the FDW7 and must be borne by the employer8.
The Employment Agencies Administration (EAA) of the Labour Department is responsible for regulating
the operation of agents through licensing, regular and surprise inspections, complaints investigation and
prosecution to ensure that they are operating in compliance with the law.
4 Tan, Carol G. S. 2014. “How Dewi Became a Litigant: Migrant Domestic Workers as Litigants in Hong Kong”,
Southeast Asia Research Centre, City University of Hong Kong, Working Paper No. 151, April 2014. 5 Varia, Nisha, 2007. “Globalization Comes Home: Protecting Migrant Domestic Workers’ Rights”, Human Rights
Watch, pages 3 & 8. 6 Hong Kong Labour Department Website. “Employment Agency Regulations” Accessed 3 October 2015.
http://www.labour.gov.hk/eng/legislat/content2.htm 7 There is some lack of clarity in this area. For example the payment of training fees in the Philippines. The
Mission for Migrant Workers has argued that this should be shouldered by the employer in Hong Kong while the
Labor Department in the Philippines contends that this should be shouldered by the worker/applicant. 8 See links to Hong Kong labour Department for recommendations to employers:
domestic-helpers/ 16 Only one of the convictions was specifically for overcharging. 17 HKFP, 10 July 2015 “Government fails to prosecute employment agencies exploiting domestic helpers”,
Recruitment Costs – Hong Kong, April 2016 Page 8 of 16
In the face of a highly publicised case of FDW abuse in 2014 (Erwiana Sulistyaningsih) many Hong Kong
NGOs and charities have called for regulatory reforms18. As recently as June 2015, the Legislative Council
Panel on Manpower19 expressed concern that some FDWs (particularly from Indonesia) incurred large
debts in order to meet fees and commissions charged by intermediaries in their home countries. The
Administration responded that while HK has no legal requirement that FDWs use agents in HK, such
requirements are imposed by countries of origin. For instance, the Philippines does not allow direct hiring
for first-time FDWs, while the Indonesian Government only allows hiring through accredited agencies.
Notwithstanding the lack of jurisdiction over the overseas operations of agencies, the HK Administration
indicated that through its regular contacts with the relevant Consular Generals, it had brought to their
attention concerns about "bonded labour" and urged them to draw the problem to the attention of their
respective governments so as to tackle the issue at source.
With regard to the strengthening of the regulation of agencies in HK, Panel on Manpower members
suggested that a more stringent licensing scheme for agents should be adopted together with a code of
practice for their operations. They suggested reference to the Singaporean experience of regulating
agents under a licensing scheme with a demerit points system.
Improvements/Solutions Offered by NGO’s and others
Amnesty International’s 18 June 2013 submission20 to the HKSAR Legislative Council Panel on Manpower
argued that even though Hong Kong has comprehensive labour laws and protections, at present the
authorities are failing in their efforts to adequately protect migrant domestic workers. There is also a lack
of robust cooperation mechanisms between the Hong Kong authorities and governments in countries of
origin and solutions must overcome the dual jurisdictional nature of the problem.
They pointed to a need for pro‐active monitoring, investigation and prosecution of agencies and loan
companies. They recommended solutions that the Hong Kong SAR government should consider in
particular in regards to migrant domestic workers from Indonesia:
18 For example. SCMP, Wednesday, 19 August, 2015, “Make Hong Kong a safe place for domestic helpers,
lawmaker urges, ahead of talks with Philippine and Indonesian officials”. 19 HKSAR Legislative Council Secretariat, Panel on Manpower, 16 June 2015, “Employment of Foreign Domestic
Helpers”, Background Brief. LC Paper No. CB(2)1683/14-15(06). 20 Submission by Amnesty International, “Intermediary charges for foreign domestic helpers”, Agenda Item iv,
Panel on Manpower Meeting, Tuesday 18 June 2013 Legislative Council Paper No. CB(2)1386/12-13(01).
RESEARCH REPORT
Recruitment Costs – Hong Kong, April 2016 Page 9 of 16
1.1 Bilateral cooperation by the Hong Kong and Indonesian authorities that acknowledges the dual
jurisdictional nature of migration and the need for agreement on an overall maximum recruitment
fee per individual no matter where that fee is incurred or repaid. Maximum fees should be decided
based on tripartite (Government, recruitment association and trade union) consultation to ensure
that they are reasonable both in maximum amount and length of repayment schedule so as not to
leave the worker without enough money to live on.
1.2 Government regulation and oversight of repayment scheme for migrant domestic workers,
including repayment schedules and interest rates that do not increase debt and thus vulnerability
to exploitation. These schemes should be government administered, robustly monitored and fully
transparent.
1.3 Proactive investigation jointly by Hong Kong and Indonesian authorities on how placement
agencies are operating, and investigation of credible accusations by migrant domestic workers and
members of civil society of illegal, excessive fees and underpayment. Investigation should not be
solely reliant on workers having to file individual complaints at the Labour Department and
Tribunal. Those found to be complicit or actively involved in the trafficking of migrant domestic
workers for labour exploitation and forced labour should face adequate punishment that reflects
the serious nature of the crime.
As a matter of urgency, ratification of the ILO Convention 189 Concerning Decent Work for
Domestic Workers, and prior to such ratification, incorporating its provisions into domestic law and
implementing it in policy and practice.
Other recommendations (some similar or focusing on elements of the above) made by researchers and
groups representing FDWs in Hong Kong include:
2.1 Strengthen the recruitment regulatory functions of the concerned government agencies in Hong
Kong (EAA) and other countries, e.g. Philippine Overseas Employment Administration (POEA). For
example, the EAA should operate on the premise that there are malpractices occurring among HK
agencies and investigate practices21. This might also include lowering the evidentiary requirements
for complaints to sworn and notarized affidavits to make it easier for FDW to bring actions.
21 Asia Pacific Mission for Migrants (APMM), December 2014, “Invisible Chains: A Study on Agency-Related
Debt Bondage Among Foreign Domestic Workers in Hong Kong”, page 42.
RESEARCH REPORT
Recruitment Costs – Hong Kong, April 2016 Page 10 of 16
2.2 Tighten and make more explicit definitions for placement/agency fees to prevent agencies in
Hong Kong, Indonesia and the Philippines from easily circumventing their respective rules22. Ensure
full transparency/documentation of fees prior to the worker making commitments. Without clear
documentation and records the ability to prosecute errant agents is difficult in Hong Kong.
2.3 Improve cooperation23 among FDW organizations and trade unions in Hong Kong and donor
countries so that collective monitoring, action, policy and other strategies can be more effectively
undertaken. For instance, create a Task Force where FDW groups and trade unions are brought
together to address these recruitment problems.
2.4 Recognize FDW groups and trade unions not only as “dialogue partners” but as legal
representatives24 or advocates for DWs in filing complaints and seeking redress from unscrupulous
agencies. The extent of involvement by charities, unions and other NGOs in supporting DWs also
suggests Government channels and resourcing are not adequate.
2.5 Remove the downside risks to the DW in reporting: Introduce measures to help DWs overcome
their reluctance to report errant agents due to the personal and economic risks of possible job loss,
recriminations, and periods without income while cases are assessed.
2.6 Visible and Accessible Government support: Ensure the relevant Government agencies are open
on days domestic workers are able to visit. Ensure sufficient publicity and circulation of
employment rules and information.
2.7 Punitive measures to reflect the personal and family impacts of malpractices on FDWs: Impose
stiffer penalties on errant agencies. The present maximum fine of HK$50,000 is not a sufficient
deterrent. Licence revocation could be mandatory on successful prosecution and/or a bond system
similar to Singapore could be introduced to dissuade errant behaviour.
2.8 Encourage direct hire channels: Create, enhance and strengthen “direct hire” channels for FDWs25
– i.e. not using recruitment agencies or third party intermediaries, whether individuals or groups –
22 Asia Pacific Mission for Migrants (APMM), December 2014, “Invisible Chains: A Study on Agency-Related
Debt Bondage Among Foreign Domestic Workers in Hong Kong”, pages 44 to 46. 23 Alliance of Progressive Labor – Hong Kong, Progressive Labor Union of Domestic Workers in Hong Kong,
Labor Education & Research Network, Norwegian Confederation of Trade Unions & Friedrich Ebert Stiftung.
“Licence to Exploit. A Report on the Recruitment Practices and Problems Experienced by Filipino Domestic
Workers in Hong Kong”, 2013, Page 14 24 Ibid. Page 14 25 Asia Pacific Mission for Migrants (APMM), December 2014, “Invisible Chains: A Study on Agency-Related
Debt Bondage Among Foreign Domestic Workers in Hong Kong”, pages 43 & 44.
RESEARCH REPORT
Recruitment Costs – Hong Kong, April 2016 Page 11 of 16
so that recruitment agencies do not monopolize or create cartels that exploit the recruitment
process, especially in countries of origin. This would require changes in those countries’ laws which
prescribe the use of agents. The widespread adoption of smartphone technology in countries of
origin could help facilitate direct hire channels.
2.9 Naming, to Shame and Praise: Maintain and make more accessible a listing of Hong Kong and
country of origin licenced agents. This should include punished or blacklisted agencies as well as
agents with positive records or practices. Agencies with good track records might be given
additional accreditations.
2.10 Ensuring money lenders comply with regulations26: Licensed local money lenders target HK’s
domestic workers and practices often breach the Money Lenders Ordinance (Cap 163). Oversight
and regulation could be significantly improved.
Efforts by the HKSAR Administration and Department of Labour to Address Issues
Possibly in reaction to submissions by NGOs and unions, together with several highly publicised cases of
FDW abuse in the last 3 years, the HKSAR government has recently announced measures to enhance
protection27 of FDW.
Enhancing FDWs’ awareness of their rights: Since 2014, LD has stepped up its promotional and
educational efforts to enhance FDWs’ awareness about their employment rights and benefits.
Strengthening collaboration with Governments of FDWs’ Countries of Origin: Since 2014 the LD has
increased collaboration with FDW countries of origin. An inter-departmental regular liaison mechanism
with both the Indonesian and Philippines CG has been set up respectively since 2014 involving relevant
law-enforcement agencies 28 . This (amongst other things) is used to discuss matters and exchange
information about problematic employment agencies and coordinate promotional efforts.
26 HK Helpers Campaign, “Comments of Policies relating to foreign domestic helpers and regulation of
employment Agencies”, Tabled to the HK Legislative Council 10 February 2014, Paper No. CB(2)894/13-14(02).
Page 6. 27 HKSAR Legislative Council Panel on Manpower, 16 June 2015, “Enhanced Protection for Foreign Domestic
Helpers” LC Paper No. CB(2)1683/14-15(05). 28 Ibid Page 3. and Labour Department Press Release June 24, 2014: