Hong Kong Chief Executive Donald Tsang announced last week that the territory would suspend the HK$400 (S$70) monthly levy as part of a package to help low-income earners and the middle class cope with rising inflation.

The new policy applies only to contracts signed on or after Sept 1.

But the Hong Kong government has drawn flak from foreign maids and their employers for failing to clarify the confusion over the new move.

A domestic helper named Dolores told The Standard newspaper that the government did not provide sufficient information about the waiver.

Local media yesterday reported that many Hong Kongers were delaying signing new contracts so that they could avoid paying the levy.

A migrant workers' centre said at least seven foreign domestic helpers have been sacked since the announcement of the waiver.

'We received phone calls from seven workers who told us their contracts had been terminated,' said Ms Sari Canete, a project organiser at the Asian Migrant Worker Centre.

'Their employers told them to take holidays and come back to Hong Kong in September so that they could enjoy the levy suspension,' she told the South China Morning Post.

The Indonesian Migrant Workers' Union said about 20 Indonesian maids have had their contracts terminated.

Ms Teresa Liu, the managing director of a maid agency, said about half of her

clients had called to reconsider hiring and some had thought about terminating their maids' contracts.

Officials yesterday held talks on the possibility of bringing forward the waiver to Aug 1. Local media said a decision could be reached this week.

Support groups for migrant workers, however, are calling for the new policy to kick in immediately.

Otherwise, said Ms Canete, more foreign maids might be sacked from now until Aug 1.

A man identified only by his surname Leung told Ming Pao Daily News that he would not enjoy the levy waiver because he had just renewed the contract for his Filipino maid on July 1.

Ms Liu said the best way forward would be to scrap the levy altogether.

There are more than 200,000 foreign maids in Hong Kong, and their minimum monthly salary is HK$3,580.

Oriental Daily News said in an editorial yesterday that 'the waiver of maids' levy may trigger conflicts between employers and foreign domestic helpers'.

Under current regulations, foreign maids are required to return to their home countries if they cannot find a new job within 14 days after dismissal.

Mr Joseph Law, chairman of the Employers of Overseas Domestic Helpers Association, said the confusion has caused employment agencies in Indonesia to stop recruiting domestic helpers for Hong Kong. An estimated 200 to 300 Indonesian workers are affected as a result, said the South China Morning Post.

But Hong Kong's Immigration Department said it had not heard of Indonesian recruitment agencies stopping the sending of maids to the city.

'The government wants to do something good, but the measure is poorly executed and now the problem has spread overseas,' Mr Law told the Post. 'It would be no surprise if agents in the Philippines followed suit very soon.'

Hong Kong started imposing the levy in 2003 when the Tung Chee Hwa administration was battling to reduce a widening budget deficit. Mr Tsang, then the chief secretary, had said proceeds from the tax would be used for training Hong Kong residents for new jobs.