Employers and directors or responsible persons of companies could face prosecution and have a jail sentence imposed on them for late payment of wages in contravention of the Employment Ordinance ("EO"). This is not anything new as the law has been around for a while. However, two recent prosecutions serve as timely reminders that individuals behind decisions not to pay wages or pay them on time could face a jail term!
In a recent case, the directors of an employing company were sentenced to six weeks' imprisonment after failing to pay wages amounting to around HK$37,450 to an employee within seven days after the expiry of wage periods as required by Section 23 of the EO.
In another case, the person-in-charge of the employing company was given a four months' jail sentence, suspended for 18 months for failing to pay wages amounting to around HK$177,000 to five employees within seven days after the termination of employment as required by Section 25 of the EO. The employer was also ordered to clear the outstanding wages via the court.
The prosecution was launched by the Labour Department in both cases.
Any employer who, wilfully and without reasonable excuse, contravenes sections 23 or 25 of the EO commits an offence and is liable to a maximum fine of HK$350,000 and imprisonment for three years. Section 64B of the EO stipulates that where any wage payment offence committed by a body corporate is proved to have been committed with the consent or connivance of, or to be attributable to any neglect on the part of, any director, manager, secretary or other similar officer of the body corporate, they shall be guilty of a like offence.
These cases demonstrate that the Labour Department does take steps to prosecute employers for wage offences and that the courts are prepared to impose prison sentences for wage offences.
Employers are reminded to ensure that wages are paid to employees in accordance with the EO. Failure to do so may not only lead to a fine but may also result in imprisonment of relevant individuals.
For inquiries related to this Legal Update, please contact:
Hong Tran (firstname.lastname@example.org)