Download Recommendation for Employers on Helpers and Debts

Recommendation for Employers on Helpers and Debts Foreign Domestic Helpers came to Hong Kong to earn money and support their families back home. They pay an average of 15-­‐30,000HKD in illegal agency fees. Most helpers will have borrowed money to pay this fee. Now in Hong Kong they are under pressure to pay back the fee, send back money to their families and while living in an expensive consumerist society full of opportunities to spend money. General Advice for Employers on helpers and debt • Understand that some level of debt is to be expected; there is no point telling your helper that she is never allowed to take out a loan if she already has one. • Build a professional relationship: have a work contract; monthly pay slip and work plan: go through it all with her: it is an important part of management and clarifying the relationship. Set your expectations clearly and make sure that your helper understands them and can carry them out. • If you suspect your helper is facing financial hardship sit down with your helper to discuss the situation and possible solutions in a calm and non-­‐intimidating manner. • If your helper has taken out a loan, you may be willing to consider taking over the loan so that the helper pays you back. This can save her from getting into more serious trouble with unscrupulous loan sharks and from paying exorbitant interest rates. • If you are willing to lend your helper money to pay off the loan, it is important that you set up a written agreement about the amount and how she will be paying for it, the length of time/number of months and how much per month , and if it will be deducted from her salary. • As part of the repayment agreement you can recommend that your helper attends a financial management workshop or a Financial Health Desk to discuss steps forward and learn about debt management, goal setting and budgeting. • As an employer, you are not her financial advisor-­‐ so even if you are willing to help her, make sure she gets access to independent help (one-­‐to-­‐one coaching, training, workshops etc). Responding to a request for a loan/salary advance • Ultimately it is up to you to decide if you are willing to loan your helper money or to give her a salary advance. As an employer you are not under any obligation to loan money to your helper. However, it is important to remember that very few migrant workers will have money to pay for unexpected expenses such as family medical emergencies and if they are not able to borrow the money from you they will likely be forced to borrow money from other sources who may charge exorbitant interest rates. • Before making a decision, sit down with your helper to discuss the situation and possible solutions in a calm and non-­‐intimidating manner. Try to get as much information as possible about what they money is for and discuss with your helper how and when the money can be paid back. • If you are willing to lend your helper money to pay off a loan or for any other reason, it is crucial that you set up a written agreement about the amount and how she will be paying •
for it, the length of time/number of months and how much per month , and if it will be deducted from her salary. As part of the repayment agreement you can recommend that your helper attends a financial management workshop or a Financial Health Desk todiscuss steps forward and learn about debt management, goal setting and budgeting. Tips for employers wanting to prevent their helper getting into debt • Understand that some level of debt is to be expected; there is no point telling your helper that she is never allowed to take out a loan if she already has one. • Where possible hire a helper already in Hong Kong (look at ads on the DB Forum and AsiaExpat) and do it without using an employment agency, or use one you are sure does not overcharge. • Get to know your helper early on and ask her about her financial situation with diplomacy and discretion; allow her to feel comfortable in talking to you about this – the more she feels she can share with you the less she may need to hide problems as they occur. • Prevention is much easier than cure. Encourage your helper to learn how to stay in control of her finances by sending her to a financial literacy workshop. • You can also encourage your helper to think long-­‐term, not just about the next phone call to her family or next Sunday, but several years in advance. Ask what her goals are for the future, and how she plans to achieve them. • Ensure you helper has a bank account. Some banks in Hong Kong are not very welcoming when approached by domestic helpers so you may need to accompany her to the bank to open an account. Always pay her salary by bank transfer. You can encourage your helper to open a second bank account and have an automatic transfer from her main bank account (where her salary is transferred to) to this second one for savings. • Learning by doing: encourage her to manage the money you entrust her for errands, shopping, etc.: ask her to track all transactions and keep the receipts, reconcile the cash at the end of the day or week. Encourage her to budget the money she will spend on your behalf-­‐ all these skills will help her to better manage her personal money too. For further information about financial management workshops or the Financial Health Desk please visit www.enrichhk.org or contact us on [email protected].