How to deal with a loan asked by your Helper?
Unfortunately many foreign domestic helpers are caught in download spirals of debt. This can be due to inflated fees on loans that they owe to domestic helper loan sharks. When you take this into consideration, it can be a major problem for you as the employer, even before they start their job. As their future domestic employer, it’s in your interest to make sure your potential maid has no debt. One of the best ways to limit the possibility of a domestic helper having debts is through direct hire. This will ensure that you have found the worker yourself and you’ll be in charge of contacting the relevant agencies. By limiting the contact that the agency has with your worker, you can make sure he or she doesn’t pay them anything!
Talking about loan is a must
Before even managing, discussing loan or salary advances for your employee, get to know them properly. Make time to have a friendly chat about their financial situation in a considerate and thoughtful manner. This will make your worker feel more comfortable to talk about any previous debts and why they need a loan or a salary advance from you. If he or she does have debt, ask how they are going to handle it and the reason they have debt in the first place. The situation doesn’t have to be heated or awkward especially if your helper is open and honest about everything. Getting them back on track financially is both in their and your interests where loan or salary advances are concerned. One suggestion is to help your domestic worker to open up a bank account where they can deposit their salary every month.
Domestic helper should manage their finances responsibly
Most foreign domestic helpers travel to Hong Kong to earn money to support their families back home. Many pay an average of 15-30,000 HKD for agency fees… and most will have borrowed the money to pay this fee. They will probably feel under pressure to pay the fee back, hence the request to you for a loan or salary advance. Needless to say as their employer, you should always manage any such loan or salary advance properly. You could help them settle their debts but only with genuine receipts they provide as proof of what they owe, to whom and why. The next stage is to arrange an agreeable, sustainable amount they can pay back to you each payday. Discuss budgeting and creating a livable budget based on their particular circumstances. With a new helper, money can be a very big issue. It’s always a good idea from the start to make it clear that your domestic helper should manage their finances responsibly. To support your helper about loan sharks issue, don’t hesitate to contact a non profit organization like Enrich or Helpers for Domestic Helpers.
Money is Money…
When it comes to finances, remember to provide friendly advice, nothing too intimidating. After all many domestic helpers consider money a private matter. OK while lending your worker money is fine, going overboard can create problems. If your domestic helper has been with you for a while and you trust her, a small loan is fine. Never lend more than one or two month’s salary. Your worker probably won’t be able to pay it back. Chat openly about why he or she needs a loan or salary advance. Does your domestic helper have unhealthy spending habits or has there been some type of family emergency? Whatever the reason for a loan or salary advance, always make a repayment plan, maybe over six months. The golden rule is, never lend your domestic helper more money until she has repaid the loan in full. This will show them that you are managing the debt and you aren’t an easy touch.