Many foreign domestic helpers who live in Hong Kong get stuck in debt, sometimes due to their lack of money handling skills or being duped by agencies and people with high interest rates. They get seldom caught in spirals of debt.
A domestic helper’s debt can be a major headache for the employer, even before they start a job at their place. Hence, it’s in the best interest of the employer to choose a potential maid with no debt whatsoever. One of the best ways to limit any possibility of hiring a domestic helper with debts is when one goes through direct hire. The process will ensure that you have hired the worker yourself after a thorough background check through agencies. By limiting the contact of the agency, one can make sure your helper doesn’t have to pay them anything!
Give loan advances after knowing them properly
Before even managing to give out a loan, one needs to have trust on the helper and then discuss salary advances. Employers need to chat at length about their helper’s financial situation in a thoughtful manner and then think about offering advance money. Ask the helper about previous debts and the need for salary advance frankly from you. If he or she does not divulge details, you need not offer any advance as you need to be sure where the money would be used. Ask how your helper would handle the debt and the reason behind it. Do not make the situation awkward and don’t embarrass your helper in front of family members. Help them get on track financially if with salary advances if possible. Guide them about financial planning, opening up a bank account where they can deposit salary every month.
Help Domestic helpers manage their finances responsibly
Most foreign domestic helpers travel to Hong Kong to work and earn money and then support families back home. Many have to shell out an average of 15-30,000 HKD as part of agency fees after borrowing the same to pay the fee. They might be under pressure to pay the fee back, hence you might consider offering them a loan or salary advance. But it is essential that you manage such a loan or salary advance on paper and in reality. Help them settle debts with genuine receipts as proof of what they owe. Agree only on an amount that they can manage to pay back to you every payday. Discuss their budgeting style and offer ideas to manage money on particular circumstances. Do not entertain new helpers with ideas, as it would put pressure on your own finances. Help them manage their finances responsibly.
To support your domestic helper about loan sharks issue, contact a non-profit organization to aid you in this regard.
Provide sound advice before giving advances
With respect to finances, domestic helpers would generally regard it as their personal issue and might hesitate to bring their situation out in the open. Be empathetic about their situation, and provide friendly advice, without intimidating them with figures and facts. Do not go overboard in lending money as it might create problems for you.
If your domestic helper has been working with you for quite a while, a small loan is understandable. Never lend anything more than a couple of month’s salary. Your worker might feel pressurized to pay it back. Chat openly about the amount offered as advance and refrain from giving it if your helper has a history of unhealthy spending habits. If it is a genuine family emergency, you might think of offering a handy loan with easy installments, maybe over six months. Do not lend your helper more money until they have repaid the previous loan in full. Let them manage their debt personally and also make it clear to them that you do not offer loans to them easily.
Offering financial advice is a noble thing to do, although sometimes you might think of lending some money to get your helpers out of trouble. Keep a tab of the loan and also an eye on your helper’s spending habits. After all, any problem affecting the helper might indirectly affect your family routine too.
Edouard Muller is a French entrepreneur working in the Hive Sai Kung. He is the founder of HelperPlace – a leading platform to find the right domestic helper in Hong Kong.