Policies and new developments in regulating Employment Agencies

1. The operation of EAs is governed by Part XII of the EO and the Employment Agency Regulations. According to the law, an EA can only charge job seekers, including FDHs, a commission of not more than 10% of the first month’s wages received on successful placement. Any EA contravening the law is liable to prosecution and its licence may be revoked or not renewed. From 2015 to March 2018, 33 EAs were convicted with 18 being caught for overcharging. In the same period, LD revoked or refused to renew 19 EA licences.
2. To further strengthen the regulation of EAs, LD increased its annual inspection target to EAs from 1 300 in 2013 to 1 800 since 2014, and further to 2 000 in 2018. A Code of Practice for EAs (CoP) was promulgated in January 2017 for the industry to follow which sets out the legal requirements and standards that the Commissioner for Labour expects of EAs, including those involved in placement of FDHs. The CoP makes it clear that EAs should not get involved in FDHs’ financial affairs or withhold the passports or personal identity documents of FDHs. EAs contravening the standards in the CoP would risk their licences being revoked/refused for renewal. As at March 2018, the licence of an EA was revoked for withholding job seekers’ passports and three other EAs were issued written warnings for getting involved in financial affairs of job seekers.
3. As announced in the 2017 Policy Address, the Government introduced legislative amendments to afford better protection to job seekers including FDHs. The Employment (Amendment) Ordinance 2018 came into effect on 9 February 2018 to substantially raise the maximum penalty for the offences of overcharging job seekers and unlicensed operation by EAs from a fine of HK$50,000 to a fine of HK$350,000 and imprisonment for three years, to extend the criminal liability of overcharging by EAs to associates (e.g. the management and staff of EAs) in addition to the licensee, to provide new grounds for the Commissioner for Labour to refuse to issue/renew or revoke EA licences, and to provide a legal basis for the CoP.