![[Domestic Helper in Debt] What to do if your domestic helper borrows money and runs away without repaying it? Procedures for dismissing a domestic helper and prevention strategies.](/_amplify/image?url=https:%2F%2Fcms-api.primecaremember.com%2Fassets%2Fimages%2FKS_Thumbnail_domestic-helper-debt-solution-%25281%2529.webp&w=1000&h=488&format=webp&q=100)
A domestic helper borrowed money and didn't repay it, even attracting debt collectors to the employer’s door. How should the employer handle this? Kwiksure analyzes methods for handling debts owed by domestic helpers, covering how to deal with harassment from finance companies, legal procedures for dismissing domestic helpers who borrow money, and guidelines for reporting to the police, and also explains how Domestic helper insurance protects employers' rights and interests and provides comprehensive assistance to employers in dealing with domestic helpers’ debt issues.
It is common for domestic helpers to borrow money, and there are also many domestic helpers absconded after taking out a huge loan. This has led to employers being harassed and intimidated by finance companies. Since the loan procedures of domestic helpers are simple and easy to approve, the Government has been in effect since August 1, 2026 to Tighten lending measures for low-income individuals. The regulations set a maximum "repayment-to-income ratio" of 35% and 40% based on income, and also prohibit lenders from requiring borrowers to provide loan advisors. While these measures are expected to alleviate the problem of excessive borrowing by domestic workers, employers still need to closely monitor their domestic helpers' financial situation to prevent them from being burdened by debt.
Upon discovering your domestic helper's debts, calmly communicate with her to inquire about the reason for the loan and the actual amount. Then, call a finance company to verify the information, understand the loan amount, interest rate, repayment date, and current repayment progress, and then consider whether to dismiss or retain the domestic helper based on the information obtained.
Whether to retain or dismiss the foreign domestic helper, employers must never repay loans on behalf of their domestic helpers or sign any guarantee documents. Once the employer begins repaying the debts of their domestic helper, the finance company will designate the employer as a "hidden guarantor," which may lead to further harassment or extortion. If a guarantee document is signed, it means that the employer has legally assumed the responsibility of repaying the debts of the domestic helper.
In addition to communicating with the domestic helper to understand the debt situation, if an employer hires a domestic helper through an employment agency, they should immediately contact the agency for professional assistance. Employment centers can provide support to employers in areas such as document processing, worker departure procedures, legal issues, and follow-up arrangements.
If you have already received debt collection calls, letters, or even harassment visits from loan sharks, you can immediately file a police report after inquiring about their domestic helper's debts. Employers should retain all debt collection letters, record the time and content of debt collection phone calls, and even the time of harassment visits. This information should be used to alert family members and to allow the police to record the incidents to prevent harassment. If debt collectors use intimidation tactics, such as splashing red paint or making threatening remarks, it constitutes a criminal offense. Employers should immediately report this to the police and provide CCTV footage or recorded conversations as evidence.
According to Section 32 of the Employment Ordinance, employers are generally not allowed to deduct any amount from an employee's wages. It is illegal for an employer to deduct a domestic helper's salary without authorization and use the money to pay off her debts. Unless the employer has personally signed a guarantee, the employer has no legal responsibility to repay the personal debts of the domestic helper.
If a domestic helper asks her employer for money, the employer should first inquire about the reason for the need and the source of her financial difficulty before considering whether to assist. However, employers should also try to avoid lending money directly to domestic helpers to prevent them from absconding with the money or getting involved in financial disputes.
Besides direct loans, employers can also advance wages to the female worker and deduct a corresponding amount from her salary each month until the debt is paid off. According to the Hong Kong Employment Ordinance, while employers may deduct any wages advanced or overpaid to employees with the domestic helper's written consent, the amount cannot exceed one-quarter of the domestic helper's wages for that period. At the same time, employers may not charge any interest, discounts, or additional fees on advances or loans of wages.
If the employer ultimately decides to lend money to help, they need to assess the worker's repayment ability, set the loan amount within one month's salary, and have both parties personally sign a formal IOU, specifying the loan amount, loan date, and the specific amount and time of installment repayments, to protect the employer's interests. With the domestic helper's written consent, the employer may also deduct no more than 25% of the domestic helper's wages for repayment.
Incidents of domestic workers borrowing money and then absconding are all too common. Employers should be prepared for the possibility of not being able to recover the money before lending it out, and domestic helpers may also leave the company because they are unable to repay the loan.
According to the Hong Kong Employment Ordinance, a domestic helper's debts cannot be used as a direct reason for immediate dismissal without compensation in lieu of notice. If a domestic helper simply borrows money and the debt does not affect the employer, and there is no misconduct, fraud, or serious dereliction of duty in her daily life, nor does she harass the employer due to frequent visits from the finance company, the employer still needs to give prior notice or pay compensation in lieu of notice if she wants to terminate the contract. Otherwise, the Labour Tribunal may rule that the termination is unreasonable.
If a domestic helper borrows money and then disappears without a trace, and the employer has never signed any guarantee documents, the employer has absolutely no legal responsibility to repay the worker's debts. Even if a finance company comes to harass the worker, the employer should not repay the debt on their behalf.
If you discover that your domestic helper has lost contact, absconded with funds, or suffered financial losses, you should immediately report it to the police to obtain a police report number for your record. This information can also be used as proof when a finance company comes to collect debts in the future.
Complete and submit ID407E to the Immigration Department. A notice of termination of employment contract proves that the domestic helper has left the company and lost contact.
If the employer receives debt collection letters or harassing phone calls, they can send a copy of the termination of contract certificate and police report number to the finance company and post a notice outside the door to prove that the indebted domestic helper is no longer working there; if the employer is threatened or harassed, they should immediately call the police for help.
Employers can observe whether their domestic helpers suddenly become less diligent than usual, easily distracted, flustered when answering the phone, or frequently receive unknown calls and messages. If any of these signs are present, the domestic helper may be hiding something from the employer, and the employer should check on the domestic helper's condition promptly.
If the mailbox key is given to the domestic helper, the domestic helper may be able to apply for a loan using the employer's address and take away mail sent by the finance company without the employer's knowledge.
Before starting work, the employer should establish a clear and reasonable set of work rules and house rules with the domestic helper. These rules should specify the employer's requirements for the domestic helper, the domestic helper's daily work scope, rest time, and holidays, and should be reviewed and adjusted regularly to meet the expectations of both parties.
Since domestic helpers spend a lot of time with their employers, maintaining good communication is crucial. When a domestic helper behaves differently, it's possible to detect any unusual behavior early, communicate promptly to understand their difficulties, provide appropriate support, and develop improvement plans.
Some non-governmental organizations provide financial education for domestic helpers, teaching them proper investment strategies and asset management methods.
Employers can require domestic helpers to show their passports regularly to ensure that the helpers' documents are not being used as collateral for loans.
A Comprehensive domestic helper insurance can provide ample protection for both employers and employees. In addition to covering medical and personal accident insurance and assuming the employer's basic legal responsibilities, some plans also include loan protection insurance, domestic helper integrity protection, and rehiring domestic helper fees, protecting against losses caused by the domestic helper's infidelity.
A comprehensive domestic helper insurance policy typically covers "honesty protection" and "re-hiring costs." "Honesty protection" covers financial losses incurred by the employer due to the domestic helper's dishonesty or fraud, as well as the cost of replacing locks. "Re-hiring costs" cover the actual expenses incurred by the employer if a new domestic helper needs to be hired for legitimate reasons. Neither of these covers losses arising from debts owed by domestic helpers, but the Integrity Guarantee includes financial losses should a domestic helper be suspected of fraud.
Some advanced plans will cover "loan repayment protection", but the protection conditions are limited to the employer having formal evidence that he personally lent money to the domestic helper, and the domestic helper being forced to return to his place of origin due to death, serious injury, or illness, resulting in his inability to continue working and repay private loans. The loan repayment guarantee does not cover private debts incurred by domestic helpers from finance companies.
Different domestic helper insurance plans cover different aspects; you can choose the most suitable protection according to your needs.
|
Comparison of domestic helper insurance coverage (HKD) |
||||
|
Loan repayment guarantee |
Replacement Helper Expenses |
Integrity Guarantee |
Replacement and installation of gate locks |
|
|
MSIG iHelper Domestic Helper Insurance - Standard Plan |
✗ |
5,000 |
10,000 |
1,000 |
|
MSIG iHelper Domestic Helper Insurance - Enhanced Plan |
✗ |
10,000 |
10,000 |
1,000 |
|
✗ |
3,000 |
3,000 |
✗ |
|
|
✗ |
10,000 |
6,000 |
✗ |
|
|
Generali Domestic Helper Insurance |
8,000 (Optional additional protection) |
5,000 |
8,000 (Additional protection) |
500 |
*The above information is for reference only as of August 3, 2026. All information is subject to the announcements of the relevant insurance companies.
Since a domestic helper's personal finances fall under the private purview, agencies have no legal responsibility to handle their loans. However, some reputable agencies will conduct background checks on domestic helpers beforehand, vetting employers and offering assistance with coordination or referrals. Before hiring a domestic helper, it's advisable to first pay attention to the Employment Center Blacklist and review a domestic helper hiring guide to reduce risk.
Unless the employer has signed any guarantee documents, they have no legal obligation to repay debts on behalf of their domestic helper. If the employer is being harassed by moneylenders, they can immediately report the incident to the police.
No, employers cannot verify whether their domestic helpers have borrowed money from finance companies through any official public system or public search. Therefore, employers need to maintain good communication with their domestic helpers, pay attention to their daily behavior, and keep their mailbox keys safe to reduce the risk of borrowing money from them.
Employers can observe whether their domestic helpers suddenly become less diligent than usual, easily distracted, flustered when answering the phone, or frequently receive unknown calls and messages, or even frequently request to be paid earlier or in cash. These are all signs that the domestic helper may have financial problems.
Generally, Domestic helper insurance will not cover the cost of rehiring a domestic helper if the domestic helper is in debt, absconds, or is dismissed due to poor performance. The "Replacement Helper Expenses" in standard domestic helper insurance is usually only applicable in cases where the domestic helper is seriously ill, physically injured, needs to leave Hong Kong permanently, or, unfortunately, dies.
Kwiksure has over 20 years of experience in the domestic helper insurance industry, comparing quotes from over 60 insurers in Hong Kong. Use our online quotation tool now to get a free domestic helper insurance quote!
The above information is for reference only. Kwiksure takes no responsibility for the accuracy and timeliness of the information. For the coverage, mode of compensation, benefit limit and premium levels of any specific insurance plan, please refer to the relevant policy terms.
Cassidy is a content creator at Kwiksure. She mainly writes about cars and travel. She has previously worked in advertising creation and online media editing. She loves writing and is keen on discovering the latest topics. She is committed to bringing fresh, interesting and practical information to readers.
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