Mandatory insurance imperils HK hiring of Pinoy helpers

11 Nov 2010 -- Hong Kong residents have reportedly canceled contracts for Filipino domestic workers, following the Philippine government’s implementation of a mandatory insurance coverage for these workers.

Employers, recruiters and workers themselves have scored the new policy, which took effect on Monday. They described the policy as unfair and redundant, as existing labor laws in Hong Kong already require employers to secure insurance policies for foreign domestic workers.

Reports by Hong Kong-based news sites The Standard and the South China Morning Post said a local organization claimed that over 100 residents have suspended hiring Filipino helpers due to the mandatory insurance.

The compulsory insurance coverage requires employers or recruiters to secure a two-year policy coverage for overseas Filipino workers (OFWs) amounting to a fixed rate of US$144, on top of the premiums. (See: DOLE warns recruiters vs passing on insurance costs to OFWs)

The policy includes benefits of $15,000 in case of accidental death; $10,000 in case of natural death; and $7,500 in case of permanent disablement, including repatriation costs, subsistence allowance benefit, money claims, compassionate visit, medical evacuation and medical repatriation.

A certificate of cover provided by an insurance company that is licensed and certified by the Insurance Commission is now required before the issuance of overseas employment certificate or exit clearance of agency-hired overseas workers.

A recent advisory from the Philippine Overseas Employment Administration (POEA) said the accredited insurance providers are Paramount Life and General Insurance Corp., Philippine Charter Insurance Corp., and United Coconut Planters’ Life Assurance Corp.

HK laws already require insurance for foreign workers

The report by The Standard, however, said employers and recruiters are not happy as some 280,000 households shell out about HK$900 every two years for foreign domestic workers’ insurance as mandated by the region’s laws.

“(Foreign domestic workers) are adequately protected by the insurance policies that employers have bought on behalf of their workers," said Joseph Law, chairman of the Hong Kong Employers of Overseas Domestic Helpers Association as quoted in the report.

He added that many employers have voluntarily purchased comprehensive insurance of about HK$800 to HK$1,000 a year for their workers’ medical expenses, on top of the compulsory insurance.

Hong Kong’s Liberal Party on Tuesday staged a rally before the Philippine Consulate General there to protest the new policy and to call on the Hong Kong government to negotiate with Philippine authorities to revoke the “unnecessary" law.

A separate report by the South China Morning Post (SCMP) likewise also said a recruitment agency has temporarily stopped processing new workers until questions about the new policy are clarified.

"We have stopped letting new workers come to Hong Kong. The halt will continue until we know the specifics of the new policy," said Technic Employment Service Centre managing director Teresa Liu Tsui-lan as quoted in the report.

HK workers also oppose new policy

In light of this, a Hong Kong-based Filipino workers’ organization has expressed concerns that the mandatory insurance will result in job loss or additional fees for migrant workers, and has called on the Philippine government to exempt them from the new policy.

“We don’t feel protected. We are actually anxious that this new policy for mandatory insurance will create job loss or possible additional financial burden to us Filipino migrants in Hong Kong. For OFWs in HK, this new insurance is thrice redundant and an exemption should be made for us," said Eman Villanueva, secretary general of the United Filipino in Hong Kong (Unifil-Migrante-HK), in a statement.

Villanueva said OFWs were not consulted prior to the implementation of the new policy, adding that employers and agencies may eventually pass on to OFWs the burden of paying for the insurance coverage.

The POEA earlier issued a reminder that licensed recruitment and manning agencies or foreign employers should bear the cost of the insurance coverage of workers.

Villanueva, however, said: “There are many fees that are supposed to be paid for by employers but are in reality carried by OFWs such as the contract authentication fee and the OWWA fee. There is no existing concrete mechanism to ensure that these fees are not passed on to OFWs."

He cited the placement fee that is supposedly illegal but is still being charged by recruitment agencies through various modus operandi. He claimed that both the POEA and the Labor department have been unable to stop this illegal practice.

“This new rule should be reviewed. Genuine protection should not cost us our jobs or more fees for us," Villanueva said.

The Labor department’s communications head Nicon Fameronag meanwhile maintained in the SCMP report that the insurance is intended to protect OFWs.

"This is not a levy but a new law that gives added protection for Filipino overseas workers," Fameronag said as quoted in the report.

The guidelines for the new policy were published in Hong Kong newspapers on September 17, he added.

POEA administrator Jennifer Manalili could not be reached for comment as of posting time.

Records from the POEA show that Hong Kong, a special administrative region of China, was the third top destination of OFWs in 2009, with 100,142 Filipino workers deployed there last year. Of this figure, about 25,000 are domestic helpers.

Currently, there are about 140,000 Filipino domestic helpers in the region. It is also among the top countries in terms of OFW remittances, which amounted to over US$339 million in 2009.— JERRIE M. ABELLA, GMANews.TV