20 November 2008
The Mandatory Provident Fund Schemes (Amendment) (No.2) Ordinance ("Amendment Ordinance") is due to come into operation on 1 December 2008.
The Amendment Ordinance mainly focuses on the penalties employers face for non-compliance with the Mandatory Provident Fund Schemes Ordinance ("Ordinance") following a conviction.
Changes to the consequences of non-compliance with the Ordinance
The Amendment Ordinance introduces significant changes to the level of penalties an employer may face upon conviction for an offence under the Ordinance:
Currently, an employer is liable to (1) a maximum fine of $100,000 and to imprisonment for six months on the first occasion on which the person is convicted and (2) to a fine of $200,000 and imprisonment for 12 months on each subsequent occasion on which the person is convicted.
The Amendment Ordinance increases the maximum penalty for non-enrolment to a fine of $350,000 and imprisonment for three years and, in the case of an offence consisting of a failure by an employer to comply with the requirement to ensure employees become and remain members of registered schemes, to a daily penalty of $500 for each day on which the offence is continued.
- Failure to ensure contributions in respect of an employee are paid to the approved trustee of the registered scheme or the Mandatory Provident Fund Schemes Authority ("MPFA") on or before the contribution day
Currently, an employer is liable (1) to a maximum fine of $100,000 and to imprisonment for sixmonths on the first occasion on which the person is convicted and (2) to a fine of $200,000 and imprisonment for 12 months on each subsequent occasion on which the person is convicted.
The Amendment Ordinance increases the maximum penalty to a fine of $450,000 and imprisonment for fouryears in the case where the amount paid to the approved trustee or the MPFA is less than the amount deducted by the employer from the employee's relevant income as contribution.
In any other case, the employer will be liable on conviction to a fine of $350,000 and to imprisonment for threeyears.
- New offence in relation to pay-records
The Amendment Ordinance has made it an offence for employers to provide false pay-records to employees, who will be subject to a fine of maximum $100,000 and imprisonment for 12 months on the first occasion and to a fine of $200,000 and imprisonment for twoyears on each subsequent occasion.
- New power of the courts
The court may, in addition to any penalty imposed or even following acquittal, make an order requiring the employer to procure for the employee concerned membership in a registered scheme within a specified time frame and/or pay any mandatory contribution or contribution surcharge that is outstanding.
Failure to comply with such an order amounts to an offence and the employer is liable on conviction to a fine of $350,000 and imprisonment for threeyears.
In addition, the Amendment Ordinance has enhanced the MPFA's power to request information from employers and other persons for enforcement action.
For further information, please contact:
Duncan Abate ( email@example.com)
Hong Tran ( firstname.lastname@example.org)
Anita Lam ( email@example.com)
Jennifer Tam ( firstname.lastname@example.org)
Gabriel Cheung ( email@example.com)
Sylvia Keung ( firstname.lastname@example.org )
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