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Story Publication logo August 29, 2016

How Recruitment Agencies Deceive Workers from the Philippines


Au pair Lucila Espinosa Milay checks her receipt as she walks through a row of money transfer businesses after wiring part of her paycheck to siblings back in the Philippines, at Central Station in Copenhagen, Denmark, May 21, 2016. Milay pays the school fees for several of her eight siblings back home, sending money every 15 days. Remittances are a huge economic driver in the Philippines. Image by Allison Shelley. Philippines, 2016.

On paper, the au pair program is a cultural exchange program. But for many people, the motivations...

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Au pair Lucila Espinosa Milay checks her receipt as she walks through a row of money transfer businesses after wiring part of her paycheck to siblings back in the Philippines, at Central Station in Copenhagen. Milay pays the school fees for several of her eight siblings back home, sending money every 15 days. Remittances are a huge economic driver in the Philippines. Image by Allison Shelley. Philippines, 2016.

As Rob and Rose handed over the stack of documents, neatly filed and segregated by size, they began to tell their story.

The two worked in a restaurant-bar in a remote resort town in northern Europe where they say they were made to work more than 12 hours a day, seven days a week. After more than a year, they could not take it anymore.

"We were not paid for overtime and less than what was promised in our contract," said Robert, 43, who was hired as a cook.

He pointed to a stack of half-sized yellow papers - his timesheets. Every day, there were numerous stamps. "I had to work at the restaurant in the morning, at the cafe in the afternoon, and man the bar at night. Look at the time stamps, I barely had time to sleep," he told DW.

"It says we were going to be paid $2,800 (2,481 euros) but we only got $2,400," said Rose, 27, taking out a copy of her contract and the receipts that showed how much she paid the recruitment agency in the Philippines who got them the job.

"We can file a case against the recruitment agency for overcharging and contract violation," Laorence Castillo, a program officer at Migrante International, told DW after listening to their story and studying their documents.

Migrante International receives hundreds of cases like this every month. Rob and Rose, Castillo said, are among the lucky minority who have complete documents and coursed their employment through a licensed recruitment agency and thus shares liability with the employer.

"They can run after the recruiter. Those who were directly hired by a company cannot. It's even worse for those who fall prey to scammers who just run off with their money," said Castillo.

Globalized work force

After more than 40 years of exporting its labor force, the Philippines has over 10 million guest workers and immigrants around the world, earning it the reputation of being among the top labor-sending countries in the world. Every day about 4,000 workers leave the country to work abroad, mostly in low-wage service jobs.

Remittances from these workers are low in value but high in volume, providing a steady cash flow for waiting families back home and for the country. In 2015, remittances pumped $25.7 billion (22.7 billion euros) into the economy, making overseas employment financially advantageous for the country and adjacent industries that depend on it like recruitment agencies.

The main source of income are the recruitment fees similar to a finding fee that an employer would pay a head hunting company for outsourcing its human resource function.

Under the Migrant Worker Act, a recruitment agency can charge the equivalent of about one month's salary to workers for its placement services. However, more often than not, that cost is passed on to the worker and not the employer.

Domestic workers and seafarers are exempted from paying but that does not mean that they don't.

"Everyone is willing to pay. Workers view it as an investment that can be recovered," said Marie Apostol, founder and CEO of Fair Hiring Initiative (FHI), a social enterprise that has a strict "no-fees" hiring policy.

A number of labor experts say that recruitment fees can go anywhere from $1,000 (886 euros) to $5,000 (4,431 euros) with factors like high salaries, the possibility of bringing family over or acquiring permanent residency (as in the case of Canada or the United States) driving up the cost way beyond the allowable one month salary.

"The workers are so desperate for a job that they will just shoulder the fees. It has become so accepted to pay that no one really questions it anymore," underlined Apostol.

And this creates problems for both the recruitment agencies and the worker.

"Going into debt as a result of the high recruitment fees makes the worker vulnerable to various other factors like forced labor, trafficking or debt bondage. It is like a chain so it is important to address this issue before it escalates," Hussein Macarambon, a project coordinator at the International Labor Organization (ILO), told DW.

Based on their case records, Geraldine Mendez, OIC of the Anti-Illegal Recruitment Branch of the Philippine Overseas Employment Agency (POEA), says that recruiters employ a variety of tactics ranging from issuing tourist visas to workers as easy entry to a country, to paying airport officials to act as "escorts" and get them through the formalities of immigration.

The more people involved the more the worker has to pay.

"The recruiters know that the worker can't pay so they will point them to a lending agency where they can borrow money at interest rates of as high as 50 percent," explained Mendez, citing a typical scenario in the case of Taiwan-bound workers. "The worker will issue post-dated checks, and at some point or another, will fail to pay. That is the start of debt bondage for the worker," she added.

Addressing the problem

To help address the issue, the ILO initiated a recruitment project as part of a global initiative to foster fair recruitment practices and prevent human trafficking.

The project will be rolled out in Jordan, Nepal, Tunisia and the Philippines and focuses on promoting fair business practices and empowering and protecting workers through information systems that can collect and validate complaints and refer them to authorities for appropriate action.

Solving the problem is a mammoth task that involves plugging holes in a recruitment chain that starts from small remote villages and extends to different landing points overseas to addressing corruption at the various levels of government.

"Corruption exists and there are no protections for agencies that will not play the game. It disadvantages good players and rewards the bad, who are willing to pay the bribes. This makes it very difficult to change industry practices," said Apostol.

"Right now, it is a complaints-based system. If no one complains, then nothing will be done. Complaints don't show the real magnitude of the issue because they only show the number of workers who complain and there are many more who do not file complaints but have paid excessive fees or have been lied to about their contract terms," Apostol added.

The POEA has the authority to investigate illegal recruitment practices, suspend recruitment agencies and even revoke their license to recruit workers for overseas employment. But the agency is severely undermanned and depends on complaints to assist them in monitoring and jumpstart investigations.

"Currently, we have about 6,000 cases pending as of this year and a staff of about 30 working on them," said Mendez.

But some people are not very hopeful that closing erring agencies will solve the problem.

"We have seen these agencies close only to reopen under a different name. When you look at their papers, they use the names of their relatives, maid or their driver as the business owner," said Mic Catuira, deputy secretary general of Migrante.

That's why Rob and Rose are still among the lucky ones who have a strong case against their recruiter. With their documents as support, they can file for money claims at the Department of Labor and Employment's labor court which can compel their recruitment agency to pay them any withheld wages and overtime pay.

Charges for human trafficking will be complicated because it will involve their employer, who is a foreign national. It will take more time–time that Rob and Rose are not willing to sacrifice.

Already, the two are planning to go back abroad and are hoping they will be luckier in another country. The two tried working in the Philippines before but wages are just too low for the kind of jobs they can get.

"That is the root of the problem. Until we solve the issue of low wages and lack of jobs here, people are going to keep looking for better opportunities abroad and they will keep paying just so they can leave," said Catuira.



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Migration and Refugees

Migration and Refugees
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