LCQ17: Default on payment of wages to employees
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Question:
There are views pointing out that the economic development of Hong Kong faces many challenges, including a series of business closures and frequent wage default problems in the construction, catering and retail industries which impair workers' rights. Under the Employment Ordinance (Cap. 57), employers who fail to pay wages to employees within seven days after the expiry of the wage period is liable on conviction to a maximum penalty of a fine of $350,000 and imprisonment for three years. In this connection, will the Government inform this Council:
(1) of the number of cases of default on payment of wages to employees received by the Labour Department (LD) in each of the past three years, as well as the average amount of wages in arrears per person in each case, together with a breakdown by industry;
(2) of the number of cases in which the LD initiated prosecutions against wage default cases in each of the past three years (including the cases in which fines, imprisonment or community service orders were imposed); among the cases with fines imposed, the average amount of fine in each case;
(3) regarding wage default cases, of the criteria adopted by the LD for determining whether criminal prosecution against the relevant parties will be initiated;
(4) whether it has reviewed if the current penalties for wage defaults have sufficient deterrent effect; of the measures put in place by the authorities to further strengthen monitoring and regulation to eradicate defaults on payment of wages to employees and abuses of the Protection of Wages on Insolvency Fund; and
(5) of the measures in place to further strengthen publicity and education efforts to remind employers not to default on payment of wages and risk violating the law?
Reply:
President,
The Labour Department (LD) is committed to combating wage offences through multi-pronged strategies, including proactive follow-up of reported cases, intelligence gathering, proactive inspections, in-depth investigations and prosecutions. In addition to stringent law enforcement, the LD reminds employers through various channels of their statutory obligation to pay wages, and encouraging employees to promptly pursue outstanding wages to protect their rights and interests.
In response to the Member's question, the reply is provided below:
(1) From 2022 to 2024, the number of cases caused by wage disputes and handled by the LD with a breakdown by industry is at Annex 1. The LD does not keep the figures on the average amount of wages in arrears per employee in each case.
(2) From 2022 to 2024, the number of summonses heard in respect of wage offences under the Employment Ordinance (EO) prosecuted by the LD each year, the number of summonses convicted and the average fine for summonses convicted each year are at Annex 2.
(3) While handling cases with suspected wages in arrears, the LD will invite the employees to provide further information if it is discovered that the employers may have violated the EO. If there is prima facie evidence of contravening the EO, the employees will be invited to act as prosecution witnesses to testify against the employers who are suspected to have contravened the law. In accordance with the Prosecution Code promulgated by the Department of Justice, the LD will assess whether there is sufficient evidence to prove that an employer has wilfully and without reasonable excuse contravened the wage payment requirements under the EO. If there is sufficient evidence, the LD will initiate prosecution.
(4) The Labour Relations Division of the LD has been maintaining close liaison with working partners and relevant stakeholders, gathering and assessing the intelligence from different sources on wage defaults. If the LD is aware of an individual employer with wage default, the LD will proactively reach out to the persons-in-charge of the concerned establishment, remind and urge them for settlement of employees' wages in accordance with the EO and the terms of employment contracts; and keep track of the status of wage payment.
According to the EO, an employer who wilfully and without reasonable excuse fails to pay wages to an employee when it becomes due is subject to a fine up to $350,000 and imprisonment for three years. If the default of wages is committed with the consent, connivance of, or negligence of body corporate's director, manager, secretary or other similar officer, then such person shall also be guilty of the like offence and is liable to the same penalty. Upon stringent enforcement of the law over the years, employers are generally cognisant of the serious consequences of wage defaults.
To prevent the abuse of the Protection of Wages on Insolvency Fund (PWIF), the Government has set up an inter-departmental task force comprising representatives from the LD, the Commercial Crime Bureau of the Hong Kong Police Force (the Police) and the Official Receiver's Office (ORO) to strengthen proactive investigation of suspicious cases. The LD rigorously verifies and closely monitors every application to the PWIF. If the company responsible persons are suspected of illegal transfer of assets, theft of company money, evasion of liabilities by deception, failure to keep proper accounting records, etc., the LD will refer such cases to the Police and/or ORO for follow-up. Besides, if any person is found to have provided false information in respect of a PWIF application, the LD would take enforcement action.
(5) The LD will continue to conduct extensive publicity, including broadcasting television and radio Announcements in the Public Interest, placing advertisements in newspapers and publications of major employer associations, organising exhibitions, displaying posters and distributing leaflets, to remind employers to fulfil their statutory obligations to pay wages. The LD has also set up and widely publicised a complaint hotline (2815 2200) to encourage and facilitate employees to report wage default cases.
Ends/Wednesday, October 8, 2025
Issued at HKT 11:15
Issued at HKT 11:15
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