Financial Tips for Foreign Domestic Helpers (Part 2)

The previous episode on financial management tips for foreign domestic helpers briefly explained how to handle debt and provided some background on common debt issues. However, prevention is better than cure. Rather than addressing problems after they arise, employers can teach or assist domestic helpers in enhancing their financial knowledge and handling related issues. This episode, we will suggest some methods to educate foreign domestic helpers and proactive steps employers can take.

Related Article: Financial Tips for Foreign Domestic Helpers (Part 1)

1. Choose a reputable agency

As previously mentioned, agencies may charge both employers and foreign domestic helpers for their services. According to Hong Kong law, specifically the Employment Agency Regulations Section 10 and Schedule 2 Part II, agencies cannot charge foreign domestic helpers more than 10% of their first month’s salary as a service fee or commission. Reputable companies will adhere to these regulations.

2. Help foreign domestic helpers open a local bank account

It is not easy for foreign domestic helpers to open a bank account in Hong Kong, as some banks may refuse their applications. Employers can accompany their helpers to the bank to increase the chances of success. Bringing the original contract is advisable, as some banks require it as proof of address.

3. Encourage saving habits

Suggest that foreign domestic helpers open two bank accounts and deposit a portion of their savings into one of them. Setting up automatic transfers from the payroll account to the savings account each month can encourage regular saving.

4. Discuss potential borrowing scenarios

Employers should discuss borrowing scenarios with their helpers patiently, without a tone of blame or command. Remind them that if they need emergency funds, they can communicate with their employer and even consider salary advances, provided there is written documentation. Employers should avoid being guarantors for loans but can help check the background and documents of loan companies to prevent borrowing from illegal lenders. It is crucial to advise helpers against being guarantors for others to avoid being liable for someone else’s debt.

5. Remind helpers to prioritize themselves

When remitting money back home, remind helpers to set aside some funds for personal emergencies to avoid falling into loan traps during sudden financial needs.

6. Review remittances

With the helper’s permission, review their remittance amounts to help assess their financial arrangements and determine if the balance between income, expenses, and remittances is reasonable.

7. Discuss loan proposals

Assist helpers in clarifying their needs, such as the purpose and amount of the loan. Ensure they understand the background and terms of the lending company, including interest rates, repayment periods, and whether the lender is licensed in Hong Kong. The most important aspects are the repayment plan and related documentation to avoid falling into traps set by illegal lenders.

8. Beware of romance scams and extortion

Remind helpers to be cautious in making friends, as bad influences may encourage borrowing. If they have a boyfriend, they might get gaslighting. Regularly remind helpers not to act on emotions and to be discerning in their relationships.

9. Beware of investment scams

Many high-return investment schemes are circulating, and helpers with limited financial knowledge are vulnerable to pyramid schemes. Remind them to thoroughly research any investment plans and consult their employer or relevant organizations if in doubt.

10. Assist in retirement planning

Since foreign domestic helpers in Hong Kong are not eligible for the Mandatory Provident Fund Scheme, they can only receive long service payment (if they have worked continuously for the same employer for five years or more). Retirement planning becomes crucial. Help them calculate the long service payment amount they might receive after five years and plan accordingly.

These methods are more effective when conducted in an atmosphere of mutual trust between employer and helper. Regular communication and care in daily life help build a harmonious employer-helper relationship, reducing conflicts and other problems, which benefits both parties in the long run.

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The information provided in this article is for general reference only and should not be considered as any form of advice. Our company assumes no responsibility for its use