HONG KONG (Thomson Reuters Foundation) - The multi-million dollar domestic worker recruitment business is pushing thousands of women into crippling debt by charging hefty fees for finding jobs, the co-founder of an employment agency said on Tuesday as he called for an overhaul of the industry.
Scott Stiles of Fair Employment Agency (FEA) said asking employers to shoulder the cost of labor migration rather than the workers could transform a sector infamous for its abusive practices, not just in Hong Kong but across Asia and elsewhere.
FEA conservatively estimates that Hong Kong's more than 300,000 domestic workers, who mostly come from poor families in the Philippines and Indonesia, pay at least HK$700 million ($90 million) per year in illegal fees.
"By charging only the employer, our clients will be able to work more freely as they will not have large debts and can start sending money home straightaway," Stiles told the Thomson Reuters Foundation.
FEA, launched in February, focuses on matching domestic helpers with employers, who pay up to HK$7,500 for its service, including visa and consulate fees, the cost of a medical examination, processing fees and a flight to Hong Kong.
The government stipulates employers should pay domestic helpers a minimum monthly wage of HK$4,110. Recruitment agencies are allowed to charge workers 10 percent of their first month's wage.
But Stiles says in reality average fees are nearly 20 times higher, amounting to HK$8,000. Agencies tell domestic helpers the extra is for training costs and other expenses.
To cover these fees, domestic workers are forced to take out loans, falling prey to moneylenders who can charge up to 60 percent annual interest, resulting in spiraling debt.
"If we make it fair for everyone - the employers, the domestic helpers and society as a whole - the system can be changed for the better, without agencies taking advantage of domestic helpers," Stiles said.
FEA, which is run as a social business that reinvests its profits into the company, has placed 180 domestic workers so far, with a goal of 450 by the end of the year.
The International Labour Organisation (ILO) says recruitment fees should not be charged to any worker but concedes that the practice is prevalent across Asia, home to the majority of the world's 53 million domestic workers.
The case of Erwiana Sulistyaningsih, an Indonesian domestic worker severely beaten and deprived of food by her Hong Kong employer is a case in point, Stiles said.
It made headlines because of the severe abuse she suffered for 10 months and a rare prosecution that resulted in a six-year jail sentence for her former boss.
What is less well known is that her case was directly connected to an unethical employment agency, which forced her to return to the abusive home until she had paid off her illegal loan even though she had asked her recruiters for help in the early days of the abuse.
Both the Philippines and Indonesia, from where more than 90 percent of Hong Kong's domestic helpers come, have announced that they will stop sending them, partly because of the way domestic workers are treated.
Earlier this month, Hong Kong's Labour Department reminded the territory's 2,600 registered recruitment agencies in a strongly worded letter that they face fines and having their licenses revoked if they ignore the law.
"The Employment Agencies Administration would also like to reiterate that overcharging of commissions from job-seekers will not be tolerated," the letter said.
Even though some agencies have been punished, enforcement of the law needs to be strengthened, Stiles said.
Reporting By Astrid Zweynert; Editing by Emma Batha; Please credit the Thomson Reuters Foundation, the charitable arm of Thomson Reuters, that covers humanitarian news, women's rights, trafficking, corruption and climate change. Visit www.trust.org