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The Protection of Wages on Insolvency (Amendment) Bill 2011 (Bill) is gazetted today (June 30) and will be introduced into the Legislative Council for first and second readings on July 13.
The Bill seeks to amend the Protection of Wages on Insolvency Ordinance to expand the scope of the Protection of Wages on Insolvency Fund (the Fund) to cover pay for untaken annual leave and untaken statutory holidays under the Employment Ordinance (EO).
The Government proposes the Fund to provide payment for two new items, viz (a) pay for annual leave under the EO not yet taken by an employee, not exceeding the employee's full statutory entitlement for the last leave year (ranging from seven to 14 days' pay depending on the employee's length of employment); and (b) pay for statutory holidays under the EO not yet taken by an employee within four months before his last day of service. An employee can be granted, in addition to the existing coverage under the Fund, ex gratia payment for the above two items subject to the ceiling of $10,500.
The Fund provides timely relief to employees in the event of insolvencies of their employer. At present, the maximum payment that an employee can now receive is $278,500, including four months' wages up to $36,000, one month's wages in lieu of notice up to $22,500 and severance payment up to $50,000 plus 50% of the remainder of the entitlement. The Fund is mainly financed by an annual levy on each business registration certificate. It is administered by the Protection of Wages on Insolvency Fund Board (the Fund Board) which consists of employer and employee representatives as well as public officers.
The Bill will enhance the protection to employees of insolvent employer. The Fund Board and the Government have taken into account multiple factors in making the proposal, including different views of stakeholders, the established principles in administering the Fund, the interests of employees and the burden on businesses.
Ends/Thursday, June 30, 2011
Issued at HKT 09:30
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