From October 1, employers who hire, or renew a contract with, a foreign domestic helper will have to pay a levy of $400 per month for the duration of the standard two-year contract period.

It will be payable upfront in a lump sum of $9,600 or in four equal instalments of $2,400.

The measure will bring in $150 million in income for the Government - if all employers pay the full amount for the 210,000 foreign domestic helpers in the territory, said Assistant Commissioner for Labour Do Pang Wai-yee.

The official for Policy Support & Strategic Planning said the levy will be used for the training and retraining of the local workforce to enhance their employment opportunities.

New measure unrelated to earlier pay cut

Ms Do stressed that the move is unrelated to the $400 monthly salary reduction for foreign domestic helpers introduced in April.

The pay adjustment, she explained, was due to the steady drop in a basket of economic indicators since 1999, when the foreign domestic helpers' pay was last reduced.

Assistant Director of Immigration Simon Peh said if employers submit applications before the helper's contract expires on or before October 28, they will not be subject to the levy payment.

A visa for the concerned helper will not be issued until the lump sum or first instalment is paid.

Employers who fail to pay on time will have to forfeit the benefit of instalment payments and pay the balance in full.

No signs of mass lay-offs

He noted that there are no signs of mass lay-offs by employers trying to avoid the levy.

According to Immigration Department statistics, the first seven months of 2003 saw 18,440 renewal and 35,730 entry-visa applications. They compared to 30,670 and 65,720 applications in the respective categories last year.

As in past years, there have been far more applications in the summer months.

Ms Do believed that employers would not easily let helpful foreign domestic helpers go just because of the levy.

She reminded employers that they must abide by the employment ordinance and pay their foreign domestic helpers' no less than the minimum monthly salary of $3, 270. 

A maximum fine of $100,000 and one year's imprisonment would be imposed on offenders.

Details of the scheme

* The levy will only apply to new contracts or renewal of contracts. Employers will not have to pay the levy until they renew the contract or terminate the contract to engage a new foreign domestic helper.

* All applications for a contract renewal whose limit of stay is to expire after October 28 will be subject to the levy payment.

* Following present practice, such applications will not be accepted more than four weeks before the expiry date of the helper's limit of stay.

* Employers are reminded to note the transitional arrangements for submission of contract renewal applications.

* The levy is not refundable under any circumstance, but the unused levy balance may be carried forward for a period of four months for the employment of a new foreign domestic helper if the current helper's contract is terminated.

* All helpers should take their home leave guaranteed by their standard employment contracts at the end of the contract period and, for contract renewal, return to Hong Kong for a new contract using the new entry visa issued.

* The Immigration Department may grant an extension of stay of not more than one year together with an entry visa to foreign domestic helpers renewing contracts in cases where employers need to keep the foreign domestic helpers immediately after their current contract expires.