Newsletter: An Average Salary of More Than HK$5,000 Despite Minimum Wage Freeze by the Government

10/21/2020 07:34:27 PM

Author's note: Hong Kong's Labor Department has made some drastic movements in September, including the freezing of Minimum Allowable Wage for the first time. 

Despite that, a recent study by HelperChoice showed significant improvements, from a slight increase in average salary, wage partition by district, and the impact of COVID-19 pandemic on foreign domestic workers' employment.

All of this news, and more, in the press release below. Read on:

*****

For the fourth consecutive year, HelperChoice has analyzed the data of more than 10,000 job ads posted on its platform between September 2019 and September 2020 to determine which areas foreign domestic workers can expect to earn the most and the least. This study was carried out as the Hong Kong Labour Department was expected to announce the foreign domestic workers' minimum wage re-evaluation on September 25th, but decided to freeze the MAW for the first time.

Average domestic workers’ salary: still increasing steadily for the past 4 years

An average salary exceeding HK$5,000 for the first time

For the fourth consecutive year, HelperChoice’s annual salary survey in Hong Kong shows an encouraging trend in the average salary offered by employers. For the first time in history, the average salary of foreign domestic workers exceeds HK$5,000!

According to HelperChoice data, this year, foreign domestic workers have been earning HK$5,012 on average, equalling a 1.35% increase compared to the previous study in 2019, and a 14% increase since 2016!

Despite the slight increase of 1.35% of the average salary, the platform highlights that the increase rate is slower this year than during the previous ones (+3.05% between 2018 and 2019).

Clear disparities according to the employment location

Regarding the districts, HelperChoice identifies clear disparities in the domestic helpers’ salaries

according to their employment location. Following the trends of their previous years’

observations, families living in areas considered as more wealthy offer a higher salary to their

helpers.

In 2020, the top five Hong Kong districts with the highest wages are the Wanchai, Southern, North, Central & Western, and Sai Kung. Foreign domestic workers in these districts might expect an average salary of HK$5,257 in these areas, with several employers offering up to HK$10,000 per month.

While the Outlying Islands are absent from the highest-paid districts this year, surprisingly, North district enters in the Top 5 districts’ with the highest paid salary for foreign domestic helpers, with an average salary of, that is to say, an 8.7% increase compared to 2019.

On the other hand, the five districts offering the lowest salaries this year are Kwun Tong, Sha Tin, Sham Shui Po, Wong Tai Sin and Kwai Tsing. Employers in these areas offer an average salary of HK$4,726, which is only HK$96 above the Minimum Allowable Salary (MAW) at the time of HK$4,630.

Domestic Workers Salary Expectations

Despite this encouraging trend, the average salary offered, HK$5,012, does not yet meet the average salary expected by foreign domestic workers. According to HelperChoice data, on average, domestic helpers request a salary of HK$5,259, that is to say, HK$247 more than what employers offer at the moment.

If we go back in time, we can observe that the Minimum Allowable Salary (MAW) increases, on average, by 2.4% every year and follows the Consumer Price Index (CPI) trend, which evolves at an average rate of 2% each year (but suffered a 0.4% decrease between 2020 and 2019).

The Impact of Covid-19 on Foreign Domestic Workers’ Conditions’ Freeze of the Minimum Allowable Wage

Covid-19 has unfortunately deeply impacted a lot of Filipino overseas workers, including domestic workers. It is estimated that so far more than 345,000 Overseas Filipino Workers (OFWs) have lost their jobs worldwide, and many more struggle to find a new position abroad due to travel bans. A huge loss for the Philippines citizens and Economy as a whole, as around 10% of the Philippines’ GDP relies on OFWs remittances.

While the Hong Kong government provided help to most residents, including HK$10,000 to all permanent residents under the Cash Payout Scheme, it was decided to not raise the minimum allowable wage of foreign domestic workers this year.

This decision stresses, even more, the financial burden, as well as the difference in status and working conditions made between foreign domestic workers and other workers in the city.

Despite representing 400,000 people in the Hong Kong working force, foreign domestic workers are the only workers who cannot access permanent residency in Hong Kong after 7 years of employment in the city.

Increase in terminated contracts and longer working hours

In 2020, the HelperChoice registered a 6% increase in foreign domestic workers looking for a new job due to termination of their previous contract, mostly because of their employer’s relocation.

Mahee Leclerc, Managing Director of HelperChoice mentions: “This situation is increasing the dependence of Filipino families to foreign domestic workers still employed, or already abroad and looking for a new job. It is even more important to help foreign domestic workers who are currently in Hong Kong finishing their contracts or the ones who have seen their contracts being terminated (mostly due to financial reasons or relocations of their employer) to find another position before they have to go back to the Philippines unemployed.”

To face this, HelperChoice has set a new process in 2020 for all foreign domestic workers looking for a job, who are already in Hong Kong, helping them improve their CVs in order to find a new employer as quickly as possible.

Apart from the increase in contracts’ terminations, most of the domestic workers surveyed by HelperChoice mentioned the deterioration of their working conditions:

A majority denouncing an increase in the workload (31%), and longer working hours (25%). Unfortunately, due to the difficult social and economic situation, 21% of the domestic workers surveyed also mention being in constant fear of termination of their contract, affecting their mental well-being.

A clear digitalization of the recruitment of foreign domestic workers

With the implementation of social distancing amid Covid-19, HelperChoice witnessed a strong increase in its traffic, increasing by 150% new users between late March and early April.

Hong Kong residents have been limiting unnecessary travels as much as possible during the peak of the epidemic, most of them working from home, so it’s only logical that they switched to an online solution to hire their domestic helper instead of going to an agency.

HelperChoice has the largest database of finished contracts domestic helpers in the city, and these contract statuses are the easiest to hire in the current situation.

Mahee Leclerc affirms: “This phenomenon is not a temporary trend, but more like a structural change in the industry. After months of political unrest and now, sanitary crisis, Hong Kongers and foreign domestic workers, who were favoring traditional employment agencies before, are now turning to online services for good.”

Despite the epidemic, the “live-in” rule remains the norm

In Hong Kong, it is mandatory for domestic helpers to live with their employers. Considering the housing costs in Hong Kong, this has of course a huge impact on the domestic helpers’ budget and the money they can save or send back home.

However, the comfort of the living arrangements plays a significant part in domestic workers’ working conditions. 20% of the domestic workers surveyed would prefer to live-out, and 75% to have a private room. Earlier this month, a domestic helper lost a Court of Appeal challenging the ‘live-in’ rule in the city, saying that the live-in requirement was part of the wider systemic discrimination faced by foreign domestic workers in Hong Kong.

As employers can specify the type of accommodation they offer to their domestic workers, HelperChoice also investigated which types of living arrangements are the most common. The survey exposed that a large majority (66%) of job offers included a private room, whereas 22% offered a room shared with a child, 9% a room shared with another domestic worker, and 3% a room shared with an adult. It is important to note that domestic helpers cannot sleep in the same room as another adult of the opposite sex.

*****

Author: slickmaster | © 2020 The SlickMaster's Files