Government Seeks Expansion of the Coverage of the Protection of Wages on Insolvency Fund

The Fund provides monetary relief to employees when their employers become insolvent. Currently, employees of insolvent employers may apply to the Fund for ex-gratia payment of sums owed to them by their employers under the heads of wages, wages in lieu of notice and severance payment.

The Government is seeking to amend the Protection of Wages on Insolvency Ordinance (Cap. 380) so that the coverage of the Fund would be expanded to cover pay for untaken annual leave and untaken statutory holidays under the Employment Ordinance (Cap. 57). The amount claimed under these two heads would be subject to a ceiling of HK$10,500.

The Protection of Wages on Insolvency (Amendment) Bill 2011 was gazetted on 30 June 2011 and will be presented to the Legislative Council on 13 July 2011.

The Government's press release can be found at: http://www.info.gov.hk/gia/general/201106/30/P201106300078.htm

For inquiries related to this Legal Update, please contact:

Duncan Abate (duncan.abate@mayerbrown.com)

Hong Tran (hong.tran@mayerbrown.com)