By Lam Ka-Sing

Copyright scmp

Nepali-Hongkonger Gurung has been on the job market for four months and feels he is hitting a dead end.
He has been in Hong Kong for more than three decades, but this is his worst stretch of being unemployed, the fifty-something said.
After losing his construction job in June this year, Gurung, who uses his surname as the name by which his friends address him, found himself competing in a market where he felt increasingly disadvantaged.
At his last project at the airport earlier this year, he estimated around 40 per cent, or 2,000 of the total 5,000 workers, were not locals but imported.
He suspected many were earning lower salaries than him. The poor economy prompted hiring companies to turn to such cheaper workers, he felt.
“I think mostly that is the one reason. Those are imported from mainland China,” said Gurung, who is a father with dependants, though he declined to share further details.
His predicament reveals a growing paradox in Hong Kong. While business leaders repeatedly sound the alarm over seeming labour shortages, there are local workers struggling to find work, a situation that appears to be exacerbated by the city’s labour import scheme.

Latest statistics showed Hong Kong’s unemployment rate stood at 3.7 per cent between June and August, partly because of new graduates entering the job market.
Still, some sectors were hit particularly hard, with the jobless rate reaching 6.9 per cent in the construction sector and 6.8 per cent in the food and drink services industry.
Acknowledging the problem, city leader John Lee Ka-chiu announced a tightening of the imported labour rules in his policy address earlier this month.
But they were limited to only two specific jobs: waiters and junior cooks. Starting from September 18, employers applying to import workers for these jobs must employ at least two full-time local staff in the same position for every imported one, where previously the ratio was based on the overall company headcount.
They must also extend the mandatory local recruitment period from four to six weeks and attend a weekly on-site job fair organised by the Labour Department.
The government, however, has ruled out introducing a wider suspension mechanism, stressing the need for flexibility during a time of economic transformation.

Importing labour makes employers ‘lazy’ to automate?
The issue of dependence on non-local labour held profound long-term implications for Hong Kong’s economic structure and productivity, analysts said.
Professor Ho Lok-sang, an honorary research fellow with the Pan Sutong Shanghai HK Economic Policy Research Institute at Lingnan University, found the approach problematic.
Those coming to Hong Kong would earn much higher or premium wages compared with their hometown counterparts, and that created its own initial problems, he said.
He added that such “premium wages … leave a huge gap that middlemen and unscrupulous employers can take advantage of”, such as charging high fees or requiring initial deposits to be parked with them to secure the jobs.
Ho contrasted Hong Kong’s situation with Singapore, which he said had “no problem having relied on imported workers for decades”. Ho noted that the city state managed its system with higher levies for lower-skill workers on employers, set qualifying salaries for local labour and had a dependency ratio that varied by sector.
“Singapore’s experience shows that if well designed, it can enhance productivity,” Ho said, adding that by offering abundant imported labour, Singapore attracted industrial giants which in turn “opened up new employment opportunities for well-educated Singaporeans”.
While some employers argued that there was a genuine labour shortage in Hong Kong, official data on wages presented a more complex picture.

For a start, the average salary for local waiters has actually increased since the labour scheme began, challenging the idea that wages are being suppressed. The average monthly pay for waiters and waitresses has risen steadily, from HK$14,827 (US$1,905) in March 2020 to HK$16,783 by March 2025.
But at the same time, the scheme allows non-Chinese restaurants to hire imported waiters at the government-set median wage of HK$15,810, now almost HK$1,000 lower than the current average market salary for locals. This cheaper wage creates a tempting cost-saving incentive for employers to rely on more of them than on locals.
Pointing to another unintended effect, labour sector legislator Chau Siu-chung said the ease of importing foreign labour could slow down the pace of industrial upgrading and transformation in the long run.
Chau noted that in labour-intensive industries, some employers might prefer to import workers rather than invest in automation, especially if they felt current technology was not mature enough.
“When employers can easily bring in foreign labour, there might be less incentive to invest in and strengthen the application of technology, which in the long run could affect the pace of business upgrading and transformation,” Chau said.

Negative impact on workers, imported and local
Luke Ching Chin-wai, an artist who does photography and sculptures, said he found the government’s latest policy tweaks underwhelming.
“Increasing [the recruitment period] to six weeks, or even 10 weeks, is pointless,” Ching said, arguing it merely burdened the understaffed Labour Department. “The focus of the entire scheme is misplaced. It needs to target fake vacancies and fake recruitment.”
Ching has gone on his own independent mission to test the imported labour scheme, applying for multiple jobs. He said he wanted to investigate the process and was exposing what he said he believed were systemic flaws. He claimed that “out of nine jobs, seven had elements of fake recruitment”.
He said that “fake recruitment” could be deduced from several actions. These included employers being unresponsive or failing to provide clear job descriptions for weeks, telling local applicants that a position was already filled or that the work was “too tough” for them, and creating an overly complex application process for a low-skilled job, such as multiple forms for a simple waiter position.
Ching argued that employers failed to provide clear job descriptions and were often unresponsive, making it nearly impossible for genuine local applicants to get a fair chance.
“I’ve spent two to three weeks on an application and still haven’t figured out what the job content is,” Ching said. “The Labour Department should just send undercover agents. Then, increase the penalties to include jail time. Let’s see how many employers still need to import labour then.”

To test the application process for local workers by employers seeking to also use imported labour, the Post posed as a job candidate. A visit to the department’s Admiralty Job Centre on a Monday afternoon found no other local jobseekers waiting for on-the-spot interviews for positions under the Enhanced Supplementary Labour Scheme, which is the imported labour scheme.
For a waiter position with the Lubuds restaurant group paying around HK$15,180 per month that the Post applied for, officers requested the filling in of forms inquiring about various skills and licences, and stated that two rounds of interviews were required.
The interviewer, a talent acquisition specialist at Lubuds, said they “definitely wanted to hire locals” but stopped short of answering the Post’s question on the imported labour issue.
Another unintended consequence of the scheme is that it also affects the imported labourers.
Alice Li, a 25-year-old preschool education graduate, came from Guangdong to work as a saleswoman but was “persuaded to quit” by her manager less than a year into her contract due to the poor economy and business, losing her entire agency fee. She has been jobless since July.
“I would constantly be working just to pay the agency fee,” Li said. “I only want to go through a labour services company, because I don’t want to go through an intermediary agency again … but the opportunities are not as many.”
She felt the contract offered no real protection. “I called the Hong Kong Labour Department. It was of no use,” Li said.
“The Labour Department said the labour contract protects both parties, because when the boss does not need you, he can dismiss you with seven days’ notice … My other colleagues also said they felt very helpless.”

Why the scheme needs to stay
On the other side of the debate, employers and industry representatives argued that imported labour was necessary, primarily due to a skills mismatch in the local workforce.
Carrel Kam, secretary general at the Institute of Dining Professionals, pointed to local workers whose skill sets were not up to industrial standards but were paid beyond normal market salaries before the Covid-19 period, when there was a shortage of labourers.
With the imported labour scheme, operators would have the choice to select those people from the mainland with ready-made skills already, Kam said.
He said local culinary school graduates often found it difficult to survive in the real-world environment, as the training centre settings were comfortable and fit for training only and were “very different” from the real-life settings of busy and crowded restaurants.
But the Chinese Culinary Institute and International Culinary Institute insisted that they provided “quality and professional culinary training programmes” and maintained “close ties with the industry to cultivate professionals who meet its needs”.
Thomas Chau Wing-keung, director of the Labour Services Company, a licensed agency handling applications, said the process was fair as the employer must first advertise locally for one month, with interviews arranged by the Labour Department.
Importing labour was necessary for industries that could not hire sufficient local workers or in which local labour was too expensive or hard to manage, Chau said.
He also noted some unscrupulous employers could violate the laws with agents without a licence by unreasonably charging the imported labour agency fee or the HK$9,600 (US$1,230) Employees Retraining Levy for a two-year contract for each worker, which should have been borne by employers.
In the end, the total cost of hiring an imported worker, including a salary based on the median wage set by the government, accommodation, insurance and other costs, would not be significantly lower than hiring a local worker, he added.
The government maintains it is striking a balance. According to the 2025 policy address, the measures for waiters and junior cooks are designed to “combat abuse in a targeted manner … while ensuring businesses with genuine difficulties in local recruitment are allowed to import supplementary labour in an orderly manner to avoid business closures and collateral damage to existing employees”.
The government has also pledged to step up enforcement against illegal employment and “establish a dedicated hotline for reporting illegal workers, and strengthen intelligence collection and interdepartmental joint enforcement operations to safeguard the employment opportunities of local workers”.
Legislator Chau also said that while the new measures were helpful, many problems reported by industry workers had not yet been effectively resolved. He also felt there was still a need to have a mechanism to suspend the import of labour.
Chau said the evaluation should include the unemployment and underemployment rates of the specific industries importing labour, statistics on working hours and wages, and the number of job vacancies. He suggested that if these data points showed a sustained negative trend, the government should consider tightening the importation rules.

Chau warned that if industries became reliant on the scheme and abuses persisted, it could create a “vicious cycle” for the local workforce.
“If an industry or job type relies on foreign labour for the long term and abuses occur, it will limit the bargaining power of local workers,” Chau said.
“With no significant improvement in working conditions, it may stifle the desire of locals to enter the industry, creating a vicious cycle.”
A survey by the Society for Community Organisation (SoCO) found nearly 60 per cent of 347 respondents had an unemployed family member, with about a third calling for the importation scheme to be suspended.
SoCO deputy director Sze Lai-shan said the new measures were useful but covering only two positions limited their impact.
“If a sector’s unemployment exceeds 4 per cent, imports should be tightened. If the overall average unemployment rate reaches 3.5 per cent, it should be a matter of concern and trigger tightening,” Sze said.
For now, Gurung was not certain he could find a job in construction soon and was thinking of other options.
“If I cannot find a job by this month, maybe I can do some other things … Foodpanda maybe.”