Publication 1

The assertions footnoted in the outbound letter and in the “our Campaign” section of this website are supported below:

 “The charging of illegal fees and related criminal offenses has been extensively documented by leading human rights groups.”

Criminal abuses in the domestic worker recruitment chain have been documented by Amnesty International, Human Rights Watch, Rights Exposure and many others.  Please see our Review of the literature section here.

 “Placement fees are one of the reasons the US State Department ranks Hong Kong among the worst offenders for trafficking”

Each year the US State Department conducts its “Trafficking in Persons Report” which assesses every country for human trafficking violations.  Hong Kong is ranked “Tier 2 Watchlist” which is the lowest of any developed economy.  Further, but for a written plan to enact improvements, it would be ranked Tier 3 along with North Korea, Russia and Syria and several of other notorious violators.

A key reason for Hong Kong’s ranking is the abuse of domestic workers including especially in the recruitment chain and a substantial portion of the State Department assessment is dedicated to this issue.

The report finds:

“Some operators of employment agencies subject victims to labor trafficking through debt-based coercion by charging workers job placement fees above legal limits. The accumulated debts sometimes amount to a significant portion of a worker’s first-year salary, and unscrupulous agencies sometimes compel workers to take loans from money lenders to pay excessive fees.”

And that:

“Hong Kong law permits employment agencies to charge foreign domestic workers up to 10 percent of their first months’ salary in recruitment fees [but] agencies often charged much higher fees perpetuating debt-based coercion. The government requested employment agencies comply with a code of practice covering statutory requirements and standards for Hong Kong-based employment agencies. Despite being a violation of the code of practice, observers reported money lenders and employment agencies often operated at the same address without consequence; this enabled employment agencies complicit in labor trafficking to endebt workers through loans for recruitment fees that were often beyond the legal limits.”

A link to the online version of the 2022 report is here and the full downloadable pdf here

 “Expatriate executives are, proportionally, among the largest importers of these domestic workers.”

We can find no good statistics on the percentage of expat executive families that hire imported domestic workers but our anecdotal research through interviews with international school teachers, property agents serving arriving expats and expats themselves is that the percentage is as high as 80%. This is compared to about 15% of all households in Hong Kong that hire domestic help.

Some anecdotes from the press:

“What’s keeping Western finance executives in Asia? One reason really stood out.  The availability and affordability of live-in maids. Most expats — in particular those with young children – say they quickly overcame their initial skepticism about employing a helper and now can’t live without her.”

“The majority of expats (particularly those with children), usually hire a domestic helper. To a lot of newcomers the colonial undertones of doing so might leave a bad taste in the mouth. However, both locals and expats hire domestic helpers, and there is no social stigma against doing so.”

“Approximately, 80% of our friends, have a live out maid”

Comment from an expat in Asia Expat chat room

“The Executive Is At High Risk Of Being Party To A Transaction That Includes A Felony”

Emphatically being “party to” the transaction does not imply the executive is guilty of any criminal offense.  But the risk of criminality in the transaction is simply a matter of statistics. Research shows these illegal practices are widespread and not confined to a few rogue agencies on the “bad side” of town.  These illegal acts occur at mainstream agencies in the core neighbourhoods of Hong Kong Island where most executives live, work and hire domestic workers. Below-median-income households are not allowed to hire domestic workers so the issue of criminal recruitment practices and subsequent abuses is largely confined to the upper income professional or entrepreneurial classes.

 “The executive likely benefits financially from the underlying criminal act” 

There are two ways the executive derives a financial benefit from fee shifting to the maid. The first is unreimbursed expenses and the second is the criminal shifting of placement fees.

Unreimbursed expenses

In Hong Kong domestic workers are employed pursuant to the “Standard Employment Contract” which states that the employer shall be responsible for the following fees and expenses (if any) for the departure of the helper from her place of origin and entry into Hong Kong –

  1. Medical examination fees
  2. Consular fees
  3. Visa fee
  4. Insurance fees
  5. Administration and other government fees

In practice research shows these fees are rarely reimbursed by the employer even though he is lawfully required to pay them.

Many employers are not aware they are required to pay these fees.  Agencies, mindful of their reputations among prospective employers would be reluctant to suggest that the employer reimburse these fees and technically it’s not the agency’s responsibility to do so.

Often the agency leaves the employer with the impression that the fee he paid to them covered all required expenses when in fact it does not.  An employer might genuinely feel he was being cheated if a maid sought reimbursement when he thought the agency had already paid all these expenses.

A recently arrived maid would be reluctant to seek reimbursement for fear of losing the job she has just gone into debt to get.  She would likely be as dishonest or disrespectful.

While not a criminal offense and not entirely his fault, the executive gets a direct financial benefit from this situation because the maid often ends up paying these expenses when he is lawfully required to pay them.

The second way the employer benefits is through the illegal shifting of the placement fee onto to the maid.  Agencies compete to a large extent on price charged to the employer.  The lower the fee to the employer, the more employers that agency gets.  So, in theory a maid could go to an agency that does not charge her a fee, but that agency would be less likely to get her a job because it would generally have fewer prospective employers as customers. This competitive dynamic essentially forces agencies to illegally shift the fee to the maid or risk going out of business.  The root cause lies with the employers and they are the primary financial beneficiaries.

This dynamic is discussed by Human Rights Watch in their “Maid to Order” report finding that

“In order to lower the fees, they charge prospective employers and boost their own profits, Labor agencies have shifted the burden of recruitment and placement costs almost entirely to domestic workers, routinely charging between U.S.$875 and U.S.$1,312. Employment agencies charge employers much less:  anywhere from several hundred dollars to fees as low as U.S.$55 or even US$1 (pg. 53).  And further that

“Agents described intense competition from their peers as a reason they have lowered fees charged to employers…. One agent said, “This business is so crowded, so competitive… I don’t have the luxury of rejecting employers.  I need the money.” (pg. 55)

This research dealt with Singapore but a similar dynamic exists in Hong Kong and in the Philippines-to-Hong Kong recruitment channel, the fee shifting is a serious criminal offense.

Verite, a non-profit that helps businesses avoid Labor abuses observes that

“When workers pay their own recruitment fees, not only do those workers spend weeks, months, or years paying off that debt, but their employer altogether avoids incurring these costs. This is an improper benefit that accrues to the employer…”

The illegal fees benefit the executive by making the maid more submissive in the face of contract violations and other abuses

The executive may further benefit because the debt arising from the illegal fees and the prospect of additional fees to get a new job make it financially impossible for the maid to quit or risk being fired.  This creates a situation in which she becomes submissive in the face of contract violations and other abuses.

Human Rights Watch interviewed domestic workers who said “they stayed in situations of abuse because of their debt obligations” (pg. 4) and found many domestic workers feel trapped in abusive employment situations as a result of the large debts they must repay to labor agents, often six to eight months of their salary. Some labor agents also threaten domestic workers if they fail to repay these fees.

SEEFAR Modern Slavery 2016 Pg. 28  “The fact that most migrant domestic workers borrowed money from employment agencies in order to pay fees to these same agencies feeds into the argument that the situation of many migrants resembles debt-bondage, which is a form of modern slavery. The pressure on these women to continue working despite difficult circumstances is often high. In Hong Kong, 31% of migrant domestic workers said that they felt that they had no choice but to keep on working for their employer because of the amount of money they had paid to secure the job.

Rights Exposure found  that illegal fees makes it more difficult for domestic workers “ to challenge the exploitative practices they face.  For example, only 5 of 65 were allowed a full day’s rest on their weekly day off”.  (Rock and Hard place Pg. 4

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Domestic Workers Justice Initiative

Domestic Workers Justice Initiative: Working with institutional investors to keep their supply chains trafficking free.

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