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Maid hiring fees lower but their loans balloon

PRICE WAR: Industry players say the glut of supply of maids has led to many agencies using cheap fees


    Jul 07, 2014

    Maid hiring fees lower but their loans balloon

    A PRICE war is raging in the maid industry here as agents slash their fees to attract employers - but it is the maids who are bearing the brunt.

    Now, it can cost as little as $300 to hire a maid, down from an average of around $1,600 six months ago, checks with 15 agencies show.

    Agents can offer such rock-bottom rates because they are passing the bulk of the recruitment costs onto the maids themselves.

    As a result, the fees that the maids pay the agents have doubled, from an average of around $2,200 to more than $4,000.

    Many go without wages, or earn only $10 or $20 a month for up to eight months, while they pay off what they owe in fees.

    Most maids here earn around $500 a month.

    Agents are warning that more maids will be discouraged by the high fees and quit.

    Retention rates are already poor.

    Manpower Ministry figures show that only 42 per cent of the maids placed by agencies between February 2011 and February last year stayed with the same employer for at least a year.

    A standard employment contract is for two years.

    Orange Employment Agency owner Shirley Ng said that maids suffer a dip in morale when they have heavy debts.

    "How would you feel if you had to go without pay for eight months?" she said. "You would want to quit."

    The key reason for the price war is a glut in supply at agencies that have "no unique selling point other than cheap rates", said Carene Chin, who owns Homekeeper, one of the largest maid agencies here.

    Industry players estimate that Singapore has more than 1,000 active maid employment agencies.

    Ms Chin said: "Many agencies don't have a good reputation or a strong client base. They have nothing that lets them stand out, other than cheap fees."

    However, some Singapore agents interviewed said that recruitment fees charged to maids have increased because agents overseas are asking for more in commissions.

    Kerri Tan, managing director of United Channel agency, said: "When there is good demand for maids, the overseas agents always ask for more money."

    The way to prevent maids from being overcharged would be through strict regulations, migrant-worker activists said.

    Under the current legislation, maid agents here can charge workers recruitment fees of up to two months of their salary.

    But these laws are not sufficient, said Jolovan Wham, executive director of the Humanitarian Organisation for Migration Economics.

    He said: "Employers should foot all the fees for recruiting a worker. This would be in line with International Labour Organisation guidelines."

    Vicente Cabe, labour attache at the Philippine Embassy here, said that in recent months it had barred some local agencies from recruiting Filipino maids, as they had charged excessive fees.

    "We will suspend more agents once we find sufficient evidence to prove their wrongdoing," he said.