Foreign domestic helpers have helped many families in Hong Kong with daily household chores such as cleaning, caring for the elderly, and children, making them an important part of many households. However, many foreign domestic helpers in Hong Kong get into financial difficulties and borrow money from employers or lending companies, causing headaches for both parties. This article delves into the common reasons for domestic workers borrowing money, strategies for employers when domestic workers borrow money, ways to handle domestic workers borrowing from lending companies, and strategies for termination, among other topics.
Common reasons for domestic workers borrowing money
The reasons why domestic workers in Hong Kong borrow money typically include:
- Family responsibilities: Many domestic workers bear the burden of supporting their families, including paying for their children’s education, parents’ medical expenses, and even supporting their entire families back in their home country. Their salaries may not always be sufficient to cover these expenses, forcing them to borrow money to meet their family’s needs.
- Lack of financial literacy: Domestic workers may lack financial knowledge, not understanding how loan interest is calculated, or borrowing from loan sharks due to excessive consumption, leading to a debt trap.
- Emergency situations: Natural disasters in their home country, accidents, or illnesses affecting family members may force domestic workers to borrow money to deal with emergencies.
- Pressure from relatives and friends: Once relatives and friends back home know that domestic workers can borrow money, they may continuously request financial assistance, increasing the financial pressure on domestic workers.
- Being lured or deceived: The documents required for domestic workers to borrow money from lending companies are quite simple. They may borrow money themselves or refer fellow countrymen to borrow money and even receive kickbacks, enticing them to borrow from lending companies. Additionally, some unscrupulous domestic workers may deceive fellow countrymen in Hong Kong into providing personal information for borrowing money, leaving them in debt without their knowledge.
- Intentional borrowing without repayment: There are indeed some dishonest domestic workers in Hong Kong who plan to borrow money and leave without repayment, essentially defrauding others.
How should employers handle domestic workers borrowing money?
When dealing with requests from domestic workers to borrow money or advance their salaries, employers should first thoroughly investigate the specific reasons behind the borrowing. Employers should encourage domestic workers to openly share their financial situation, including why they need to borrow money, how the funds will be used, and if there are other ways to solve their financial problems. For example, if your domestic worker is borrowing money just to help fellow countrymen pay off debts, you should teach them to decisively refuse such requests. During the communication process, employers should maintain empathy and engage in open and supportive dialogue.
Try to avoid lending money to domestic workers
After understanding the specific situation of the domestic worker, employers can provide guidance and advice on financial management instead of lending money directly. For example, employers can teach domestic workers how to budget, prioritize their financial burdens, and discuss alternative solutions to borrowing money, helping them solve problems and consolidate long-term financial health. Only lend money to the domestic worker if you agree that it’s absolutely necessary.
Create a written agreement and establish a repayment plan
If, after evaluation, the employer decides to help the domestic worker and agrees to lend money or advance their salary, both parties should draw up a written agreement specifying the repayment period, amount, and any other conditions. This process should be done in writing and signed by both parties to protect their rights and avoid any potential misunderstandings or disputes in the future.
What if the domestic worker defaults on the loan?
Encourage timely repayment
Borrowing money by domestic workers itself does not violate the employment contract, so employers do not need to immediately terminate their employment. Employers should have an honest conversation with the domestic worker to understand the reasons for borrowing from lending companies and their specific debt situation. This includes the amount borrowed, interest rate, repayment period, and current repayment progress. Employers can help domestic workers devise a practical repayment plan, such as adjusting budgets, reducing unnecessary expenses, to ensure that they can repay on time and avoid further financial difficulties.
If the domestic worker disappears after borrowing money:
If the domestic worker disappears after borrowing money, the employer should take immediate action. The first step is to report to the police to formally document the incident and initiate legal proceedings. Then the employer should inform the Immigration Department, fill out and submit a “Notice of Termination of Employment Contract” to officially record the domestic worker’s departure status to protect the employer’s rights.
How should employers deal with harassment from lending companies?
When domestic workers borrow money from lending companies, the loan company may send related letters to the employer’s address, as this is the only legal address for the domestic worker in Hong Kong. If the domestic worker repays on time, it generally does not affect the employer, but if the domestic worker defaults on the debt, leading to the loan company visiting the employer’s premises to demand repayment or even making further threats, the employer should take decisive action.
If employers are harassed by lending companies, they should clearly explain to the companies that they should communicate directly with the domestic worker who borrowed the money to avoid being involved in debt issues themselves. If you have already terminated the domestic worker due to debt problems but continue to be harassed by lending companies, you can send a copy of the contract termination confirmation issued by the Immigration Department to the lending companies to prove that the domestic worker no longer works at your premises and request that they cease harassing you. If the harassment continues, please report it to the police immediately.
