Levels of Compensation under the ECO Increased in view of Statutory Minimum Wage

Summary

All EC insurers and employers are advised to take note that the Legislative Council passed a resolution on 17 July 2012 to increase the amounts of eight compensation items payable under the Employees' Compensation Ordinance Cap. 282 (ECO). This amendment came as a result of the substantive wage growth brought by the implementation of the statutory minimum wage since May 2011, and also the rising trend in price level and funeral expenses in the recent time.

The amendments

This includes:

• Increasing the ceiling of monthly earnings from HK$21,500 to HK$23,580. This figure is the basis for calculating the maximum amounts of compensation for permanent total incapacity (Section 9) and for death under the ECO.
• Increasing the minimum levels of compensation for death from HK$310,000 to HK$340,040.
• Increasing the minimum levels of compensation for permanent total incapacity from HK$352,000 to HK$386,110.
• Increasing the maximum amount of compensation for employees requiring attention by another person from HK$422,000 to HK$462,890.
• Increasing the maximum amount of funeral expenses from HK$35,000 to HK$70,000.
• Increasing the cost for supplying and fitting of a prosthesis or surgical appliance from HK$33,000 to HK$33,460.
• Increasing cost of repair and renewal of a prosthesis or surgical appliance from HK$100,000 to HK$101,390.
• As for the surcharge on late payment of compensation, increasing the minimum amount of surcharge imposed upon expiry of the payment period from HK$500 to HK$550 and the minimum of a further surcharge imposed three months after the expiry of the payment period from HK$1,000 to HK$1,100.

To allow time for the employers and the insurance industry to prepare for the implementation arrangements, the revised levels of compensation shall take effect from 21 July 2012.

For inquiries related to this Legal Update, please contact Angela Yim or your usual contacts with our firm.