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The following is issued on behalf of the Mandatory Provident Fund Schemes Authority:
The Mandatory Provident Fund Schemes Authority (MPFA) today (December 4) successfully prosecuted a security company at Kwun Tong Magistracy for evading its MPF contributions by setting aside and labelling part of the employee's salary as housing allowance. The employer was found guilty and fined $26,000. The MPFA reminds employers not to abuse the provision that housing allowance is not treated as "relevant income" under the existing law, and warns that it is an offence to evade MPF contributions.
An MPFA spokesperson said, "The MPFA has already introduced to the Legislative Council the 'Mandatory Provident Fund Schemes (Amendment) Bill 2007', including the proposal to include housing allowance as MPF relevant income for contribution purpose. The proposal aims to prohibit dishonest employers from evading their MPF responsibilities."
After hearing the case, the magistrate found the defendant, Underwriter Security Limited, guilty of not making full MPF contributions for an employee, contravening the Mandatory Provident Fund Schemes Ordinance (Cap. 485). The magistrate denounced the defendant's conduct as "disgusting" as it was an exploitation of its employees. The magistrate also said that there might be a jail sentence if the defendant were a company director.
The defendant, Underwriter Security Limited, which was charged for an offence under section 7A(8)of the ordinance, was prosecuted for failing to make MPF contributions of $1,470.35 over 10 months' contribution periods from April 2005 to January 2006 in respect of $2,400 of an employee¡¦s relevant income, which was labelled as housing allowance. In fact, the employee's basic monthly salary only amounted to $500 (with other allowances such as full attendance, over time work, etc).
Upon receiving the complaint, the MPFA immediately conducted an investigation into the case. Having gathered sufficient evidence and consulted the Department of Justice, the MPFA decided to lay summonses against the defendant for 10 counts of contravening the ordinance. The defendant was fined $8,000 for the first summons and $2,000 each for the remaining summonses, totalling $26,000.
Meanwhile, the MPFA encourages employees who encounter similar situations to report to the MPFA's hotline at 2918 0102 as soon as possible and to act as a prosecution witness to protect their MPF benefits and rights.
Moreover, two employers and two company directors were fined $72,500 at the Kwun Tong Magistracy today, after being convicted of offences under the ordinance.
Yu Kee Food Company Limited was charged for offences under section 7A(8) of the ordinance. The defendant pleaded guilty to eight counts of failing to make MPF contributions for its two employees within the prescribed time for the contribution periods in November 2006, and between February and April 2007. The defendant was fined $10,000 for the first summons and $3,500 for the remaining summonses, totalling $34,500.
Brilliant Smart Engineering Limited was charged for offences under section 7A(8) of the ordinance. The defendant pleaded guilty to seven counts of failing to make MPF contributions for its employee within the prescribed time for the contribution periods between January and July 2006. The defendant was fined $6,000 for the first summons and $2,000 each for the remaining summonses, totalling $18,000.
Lau Lin Kwong, director of Brilliant Smart Engineering Limited, was charged for offences under section 7A(8) and section 44 of the ordinance. The defendant pleaded guilty to eight counts of failing to make MPF contributions for an employee within the prescribed time for the contribution period between August 2006 and March 2007. The defendant was fined $3,000 for the first summons and $1,000 each for the remaining summonses, totalling $10,000.
Huang Lai Na, director of Brilliant Smart Engineering Limited, was charged for offences under section 7A(8) and section 44 of the ordinance. The defendant pleaded guilty to eight counts of failing to make MPF contributions for an employee within the prescribed time for the contribution period between August 2006 and March 2007. The defendant was fined $3,000 for the first summons and $1,000 each for the remaining summonses, totalling $10,000.
The MPFA today also pursued one claim in the Small Claims Tribunal for some $40,000 on behalf of two employees, who were owed MPF contributions by their employer.
The defendant, Man Cheong Construction Engineering Company Limited, did not appear at today's hearing. In its absence, the adjudicator ordered it to pay the MPFA the sum of $43,005.72, being mandatory contributions in arrears and surcharges payable.
The amount awarded will be reimbursed to the employees' MPF accounts as soon as it is received by the MPFA. The tribunal further ordered the defendant to pay $276 as costs in respect of the claim.
The defendant had pleaded guilty previously at Kwun Tong Magistracy to six counts of failing to make MPF contributions on time and was fined $18,500.
Ends/Tuesday, December 4, 2007
Issued at HKT 19:09
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