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The Mandatory Provident Fund Schemes Authority (MPFA) reminds employers that they must perform their duties in accordance with the requirements specified in the Mandatory Provident Fund Schemes Ordinance. To tackle the problem of some employers habitually defaulting on MPF contributions or neglecting relevant administrative arrangements, the MPFA will step up its enforcement action by imposing a financial penalty on these non-compliant employers without prior notice starting from the third quarter this year.

An MPFA spokesperson said, "Protecting scheme members' interests has always been the primary mission of the MPFA and we put a lot of effort into enforcement. Apart from strictly enforcing the law, we review and adjust our enforcement strategies from time to time to combat non-compliance for better protection of scheme members' interests.

"The MPF System has been in operation for over 11 years. While most employers are familiar with their MPF responsibilities and the required administrative work, a small number of employers fail to comply with the law. The MPFA has noticed that some employers are habitual offenders who make the required contributions and surcharges or submit the correct documents only when the MPFA follows up. To combat these problems, the MPFA will impose a financial penalty on such employers without prior notice."

The MPFA reminds employers to take note of the following responsibilities:

i. Make contributions for your employees on time
 

The law stipulates that an employer must ensure that contributions in respect of each employee for each contribution period are paid to the MPF trustee on or before the contribution day (i.e., the 10th day of the following month).

A non-compliant employer is liable to a financial penalty of $5,000 or 10% of the amount due, whichever is greater. As well as imposing a financial penalty, the MPFA may file a civil claim to recover contributions in arrears. It may also initiate prosecution against the employer with the maximum penalty being a fine of $450,000 and imprisonment for 4 years.
 

ii. Provide monthly pay-records to scheme members (except for casual employees under an Industry Scheme)
 

An employer must give monthly pay-records to employees not later than seven working days after the contribution payment. The pay-record must contain the employee's income, the MPF contribution by employer and employee, the amount deducted from the employee's wages, and the date on which the employer paid the contributions to the trustee.

A non-compliant employer is liable to a financial penalty of $10,000 on the first occasion and up to $50,000 for subsequent failures.
 

iii. Notify the approved trustee of an employee's cessation of employment (except for casual employees under an Industry Scheme)

An employer must inform the trustee in writing of an employee's cessation of employment and the date on which the employment ceased, or provide such information in the remittance statement for the contribution period that ends immediately following the employee's cessation of employment.

A non-compliant employer is liable to a financial penalty of $5,000 on the first occasion and up to $20,000 for subsequent failures.
 

The MPFA issued a letter to over 200,000 employers in Hong Kong in the second quarter, setting out their MPF responsibilities and the relevant penalties, and reminding them to comply with the law.

- Ends -

18 June 2012