Info Center

A company director was today sentenced to 21 days’ imprisonment for failing to comply with court orders to pay Mandatory Provident Fund (MPF) contributions in arrears and surcharges for the company’s employees to the Mandatory Provident Fund Schemes Authority (MPFA), after pleading guilty to the charges earlier. This is the first case in which a company director was sentenced to imprisonment for defaulting on MPF contributions and breaching the Mandatory Provident Fund Schemes Ordinance. The company was also fined $20,000 earlier.
 
The MPFA filed civil claims against the company to recover outstanding MPF contributions and surcharges of about $380,000 in 2015 and 2016. The court ordered the company to pay the arrears and surcharges. However, the company made only a partial payment. The MPFA then initiated prosecution of the case in April 2017. As of the date of the employer’s guilty plea in June 2017, about $204,000 contributions in arrears and surcharges remained unpaid. Subsequently in early July 2017, the company settled the remaining outstanding contributions and surcharges.
 
The MPFA reminds employers that it is an offence to default on MPF contributions. Employers who commit this offence are subject to a maximum penalty of a $450,000 fine and four years’ imprisonment. In addition, any employer who fails, without a reasonable excuse, to comply with a court order made in civil proceedings for the payment of MPF contributions in arrears and contribution surcharges by a specified date also commits an offence. Any employer doing so is liable for a $350,000 fine and three years’ imprisonment. In the case of a continuing offence, the employer is liable for a daily penalty of $500. 
 
The MPFA attaches great importance to protecting scheme members’ rights and proactively follows up suspected cases of contributions in arrears. If there is sufficient evidence, the MPFA will take civil action to pursue employers for outstanding contributions and surcharges. Prosecution may also be initiated against the employers.
 
In 2016-17, a total of 433 summonses were issued to employers and directors/managers of companies for prosecution in respect of their suspected MPF non-compliance. Among these cases, 371 were contributions in arrears, 47 were non-enrolment of an employee, and 15 involved failure to comply with a court order. In 337 of these cases, the employers were found guilty.
 
The MPFA urges employers to make MPF contributions on time. Under the law, if employers default on contributions, apart from paying the contributions in arrears, they have to pay a surcharge of 5% of the outstanding contribution amount. If employers have not remitted contributions on or before the contribution day, they should contact their trustees immediately to settle the outstanding contributions and the surcharges. The full amount of the surcharge goes to the employees concerned.
 
The MPFA also reminds employees that if they suspect their employers have failed to enrol them in an MPF scheme or make contributions, they should contact the MPFA as soon as possible to lodge a complaint. The MPFA’s hotline is 2918 0102.
 
– Ends –

10 July 2017