The Problem

More than 75% of the 600,000 migrant domestic workers living in Hong Kong and Singapore are charged illegal recruitment fees by employment agencies. 

At any given time, an average of 340,000 foreign domestic workers live and work in Hong Kong, more than 75% of whom are charged illegal fees by their employment agencies. It gets worse for first-time domestic workers, 85% of whom are charged these illegal fees. The illegal fees and resulting vulnerability to debt-based coercion are one of the primary reasons the U.S. State Department ranks the trafficking situation in Hong Kong among the worst in the developed world in its 2022 Trafficking in Persons Report.

In 2022, Singapore had more than 268,500 foreign domestic workers. But due to deductions by their employment agencies, often not made clear up front, it can be as much as eight months before they get a paycheck.

In both Hong Kong and Singapore, illegal agency fees coupled with little to no recourse in cases of abuse frequently create a situation bordering on modern slavery.

Investment firms put their executives at risk 

Expatriate executives at U.S. investment firms are proportionally among the largest employers of these workers (as live-in maids, nannies or helpers) with an estimated 80% hiring help. By bringing large numbers of expatriate executives into such an environment, these firms have put their executives at high risk of being party to a transaction that includes a trafficking-related felony when they hire help.

In these hiring transactions we want to make it clear, the executive is not guilty of any crime. However, research overseen by the private equity industry’s own senior advisors confirms that:

  • these types of illegal fees are rampant;
  • fee shifting means the executive is generally the ultimate financial beneficiary of the criminal act;
  • these fees often result in debts that force these women to tolerate abuse from their employers and even into abusive sex work and more severe situations of criminal trafficking.

Investment firms put their clients at risk 

Investment firms are also not guilty of any crime; but by bringing in large numbers of expat executives, they create the underlying conditions that make these felony transactions and related abuses almost inevitable. This puts many of their institutional investor clients in violation of their own pledges of “zero-tolerance” for trafficking and modern slavery.

The Solution

Domestic Workers Justice Initiative proposes a program in which the domestic worker is interviewed by an expert, who determines if any illegal fees were paid, and who serves as her contact in cases of contract violations. This solution is modeled on a U.S. State Department program covering domestic workers brought into the U.S. by foreign diplomats. The program has proven highly effective at deterring abuse at little financial cost and with minimal intrusion into anyone’s personal life.

The C.A.R.E. Program

Contact: Expert meets with the worker to reimburse illegal fees (if any) and to exchange contact information in cases of abuse or contract violations.

Anti-trafficking Education: Training provided to the executive, especially with regard to supply chains and domestic workers.

Resolve: The expert provides confidential dispute resolution services for the benefit of both parties, not just the domestic worker.

Exit: When employment ends, the expert meets with the worker to confirm that separation terms are fully compliant with the law and contract.

The Benefits

The Executive:

  • Confidence that they are acting ethically and lawfully
  • A “Seal of Approval” demonstrating no connection to crimes
  • Little or no financial cost (employers fund the program)

The Domestic Worker:

  • Reimbursed for illegal fees
  • Starts work debt-free
  • Has access to expert mediation 
  • More likely to be given a full day off, sufficient food, etc.

The Investment Firm:

  • Demonstrates respect for host country’s laws
  • Clients are less likely to suspect other supply chain issues
  • Fully compliant with broad intent of anti-trafficking/modern slavery laws

© Domestic Workers Justice Initiative

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