Strengthening the regulation of employment agencies––a win-win situation for all

15 January 2017

To enhance the protection of job-seekers and employers including families who rely on employment agencies (EAs) to arrange for foreign domestic helpers (FDHs) to Hong Kong , the Labour Department (LD) promulgated the Code of Practice for Employment Agencies (CoP) last Friday (13 January), with an aim of promoting the professionalism and service quality of the industry.

At present, there are some 2 900 licensed EAs in Hong Kong, amongst which some 1 400 are providing FDH placement services (FDH EAs). The CoP is applicable to all types of EAs. It highlights the salient legislative requirements that EA operators must follow. It also sets out the minimum standards which the Commissioner for Labour (the Commissioner) expects of EA licensees.

There are currently over 350 000 FDHs working in Hong Kong. With an aging population, the demand for FDHs by families in Hong Kong is expected to continue to grow. EAs play a pivotal role between FDHs, who come all the way to work here, and their employers by serving as their bridge and facilitating their communication. This is particularly the case for first-time employers and newly-arrived FDHs.

Given this, some of the standards as set out in the CoP are particularly relevant to FDH EAs. For example, the CoP provides that EAs should maintain transparency in business operations (e.g. a fees schedule should be drawn up). It also requires EAs to draw up service agreements with job-seekers and with employers respectively, setting out the details of the fees to be charged by EA and payment arrangement etc. Furthermore, the CoP provides that EAs should provide payment receipts to job-seekers and they should not get involved in the financial affairs of job-seekers, etc.

The CoP also provides that the licensee, management and staff of EAs should maintain professional knowledge and stay up-to-date on the laws and regulations relating to the industry. They have the responsibility of promoting the awareness of job-seekers and employers about their employment rights and obligations. EAs should also adopt good record management practices. For example, they should keep copies of all the service agreements with job-seekers and employers, and the receipts of payment and document issued etc., so that LD officers may check the documents during inspections and complaint investigations.

The Employment Agencies Administration of LD will closely monitor EAs’ compliance with the CoP and will conduct regular inspections of EAs. It may issue warning letters to EAs for rectification of irregularities detected, including but not limited to failing to meet the statutory requirements and/or standards set out in the CoP. EAs which are found to have contravened the statutory requirements set out in Chapter 3 of the CoP, or any other legal provisions in Hong Kong, appropriate enforcement actions will be taken.

In fact, prior to the promulgation of CoP, LD has in the past three financial years increased its manpower and stepped up the inspections of EAs. In 2016, the LD conducted 1 816 inspections across the territory, amongst which 1 417 (78 per cent) were inspections to FDH EAs. During the same year, LD successfully prosecuted eight EAs, among which five were convicted of overcharging commission from job-seekers while three of unlicensed operation. In the past two years, a total of ten EAs’ licences were revoked or refused for renewal by the Commissioner for various reasons.

Apart from more stringent enforcement, we have also stepped up the publicity and education efforts in raising the awareness of FDHs and employers about the points to note when they engage an EA. For example, LD has published a “Do’s and Don’ts” leaflet for FDHs, employers and EAs and a one-stop portal on employment of FDHs last April.

This time, LD has also launched a dedicated “Employment Agencies Portal” (the Portal) (www.eaa.labour.gov.hk), which is a one-stop platform with a user-friendly search function so that the public (including employers and job-seekers) can use different criteria (e.g. district and placement type) to easily check if an EA has a valid licence. The EA Portal also contains useful reference materials and publications, including the CoP, to facilitate the public to gain access to information relating to regulation of EAs in Hong Kong.

I expect the CoP and the Portal will promote the service quality of EAs and enhance the transparency of the industry, thereby achieving a win-win situation for job-seekers, employers and EAs.

Ends