Domestic workers in Hong Kong are at the mercy of ruthless agencies. Why do we allow it?

Written by Allan Bell, Founder and Vice President of the Centre. This piece was published in the South China Morning Post on 11 May 2017.

Link to article: http://www.scmp.com/comment/insight-opinion/article/2093946/domestic-workers-hong-kong-are-mercy-ruthless-agencies-why 

Other related articles recommended reading: 

• http://m.scmp.com/news/hong-kong/law-crime/article/2093836/study-finds-hong-kong-domestic-helpers-subjected-employment 

• http://www.scmp.com/magazines/post-magazine/long-reads/article/1976195/hong-kong-domestic-helpers-dreams-dashed-debt

Over the past three decades, the employment of foreign domestic workers in Hong Kong has risen dramatically. According to the Labour Department, foreign domestic workers now number 350,000 and make up 10 per cent of Hong Kong’s workforce. Yet this has not stopped employment agencies from operating unlawfully, creating a black market in Hong Kong for domestic workers and wreaking havoc on the lives of employers.

The employment agencies know it is illegal in Hong Kong to overcharge domestic workers for placement fees. The maximum allowable fee is 10 per cent of the first month’s salary, or H$431. The Hong Kong government has acknowledged that workers are charged more than this, but claims these illegal charges occur overseas. Yet, as a team of University of Hong Kong students recently verified, overcharging by employment agencies in Hong Kong is rampant. Agencies are largely undeterred by existing laws because the Labour Department and police have been unable to control them.

The government must allocate resources to investigate, charge and prosecute employment agencies for overcharging. The fact that agencies here are overcharging workers has now been proven. Multiple recent studies, including undercover videos, have provided significant new evidence of this.

Legally speaking, one of two possibilities exist: either agencies are knowingly overcharging workers, which would be a violation of their licence conditions, or their frontline employees are overcharging workers without notifying their superiors, which would probably be considered the taking of an advantage without permission and therefore illegal under the Prevention of Bribery Ordinance. While the agents and their associations have repeatedly and aggressively denied any wrongdoing, it is clear that they are either lying to save their businesses, or their own employees are responsible for the overcharging of domestic workers. Either way, for the sake of Hong Kong’s international reputation and future economic stability, the Labour Department and the Independent Commission Against Corruption should be taking a closer look.

There are more than 1,300 domestic worker employment agencies in Hong Kong, more than all of the Starbucks, McDonald’s and 7-11 outlets combined. Why are there so many agencies, many of which are hiding in dark corners of obscure buildings? By allowing the agents to proliferate and operate with effective impunity, the authorities have allowed the creation of a black market. This black market threatens our economic stability and the well-being of Hong Kong people as our population continues to age and the need for migrant workers increases.

The government would not tolerate black-market operators in any other market segment, whether it be taxi operators or pork importers, so why do they close a blind eye to employment agents?

The effect of this black market not only creates a shockingly high rate of debt bondage among domestic workers, but also causes disruption and unnecessary cost to employers, who ultimately must deal with workers who were not properly screened by agencies, with many preoccupied with paying off large debts.

Many agencies even pass the threat of legal liability on to employers by directing them to withhold a portion of their workers’ salary in order to repay agency fees – a common practice among agencies in Hong Kong. Withholding salaries in such a manner is a violation of the Employment Ordinance, which the agents well understand. But disregarding their legal and fiduciary obligations to their clients, employment agencies discreetly pass this burden onto employers, thus further shielding themselves from liability, and placing employers at additional risk.

There are also the extraordinary costs borne by Hong Kong’s taxpayers, including paying for the additional effort required for the Immigration Department, Labour Department, police and the Correctional Services Department to clean up and contain the mess created by errant employment-agency practices. And since foreign domestic workers are the foundation on which so many dual-income families depend, Hong Kong’s economy would be devastated should this supply of labour become restricted.

The answer is quite simple: the government must allocate resources to investigate, charge and prosecute employment agencies for overcharging. If the agencies are clean, much of the “downstream” problems for both the workers and their employers will disappear. The Labour Department’s talk about a code of practice is mostly just empty posturing – an unnecessary distraction meant to assuage the public. It’s time for employers across Hong Kong to be more selective about which agencies they work with. And it’s time for the Labour Department, the police and the ICAC to do their job and eliminate this black market.