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Recruitment Fees and Cost Head

Recruitment Fees and Cost Head
According to the General Principles and Operational Guidelines, recruitment fees and related costs should not be collected from workers, directly or indirectly, but this often is not what happens in practice. Most low-key labor migrants pay fees to obtain contracts and formalities which are against international conventions. Workers might find recruitment fees and related costs being imposed or collected in cash or in-kind during the recruitment process itself, or at the end of the process. Though recruiting costs are frequently substantial and unclear, the international community is working to decrease them through improved regulation and monitoring, education of migrants on their rights, and enhanced cooperation between origin and destination countries.
 
Workers may encounter recruiting fees and related charges being imposed or collected in cash or in-kind during or after the recruitment process through the private recruiting agencies. The majority of low-level labor migrants pay fees to secure contracts and formalities that violate international treaties. According to the Global Knowledge Partnership on Migration Development (KNOMAD) and the International Labor Organization (ILO) study of the Migration Cost Surveys (2016-2017), the recruitment cost indicator is greater for low-income migrant workers (Ratha et al., 2018). Furthermore, these foreign employees, whose recruiting expenses are significant, are paid less and more sporadically than what is legally promised (ibid). But ILO states that recruitment fees or related costs should not be collected from workers by an employer,  their subsidiaries, labor recruiters, or other third parties providing related services.
 
However, the genuine cost of recruiting services typically bears little resemblance to the massive costs imposed on migrants. The expense to employers is significantly less than the excessively higher rates offered directly to foreign labor. As a result, business firms should ensure that they pay the full cost of the migrants, have clear and transparent fee communication, ensure that no worker is required to pay any bond or deposit to secure their job, workers should not bear any recruitment and placement costs, provide migrant workers with confidential channels for reporting exploitation, and many other initiatives can be implemented.

Recently there was a signing ceremony held on 19 December 2021 between Malaysia and Bangladesh regarding the employment of workers. Following allegations of labor exploitation and exorbitant migration costs of up to Taka 4 lakh per worker, the Malaysian government halted recruiting from Bangladesh in September 2018. During this COVID-19 pandemic, employees in Bangladesh must undergo COVID-19 vaccination and RT-PCR testing two days before traveling, while workers in Malaysia would be confined for seven days. According to the ILO, no worker should pay for a job, and the costs should be borne by the company rather than the worker. As a result, the expatriates’ welfare minister frequently said that syndication would not be an option in the process.