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Industry Schemes


If you are an employer in the construction industry or the catering industry, chances are that you will employ short-term employees. Labour mobility within these two industries is generally high. Workers are often employed on a short-term basis and wages are usually daily-rated and paid half-monthly, weekly or even daily. The characteristics of these two industries add to the administrative burden of Master Trust Schemes participants. Industry Schemes are therefore set up and specially designed for the construction and catering industries to make MPF arrangements as convenient as possible for both employers and employees.

Casual Employee

“Casual employees” refers to employees who are at least 18 but under 65 years of age, and are employed in the construction industry or the catering industry on a day-to-day basis, or for a fixed period of less than 60 days. MPF arrangement is required for casual employees no matter how short a period they are employed, even if it is just one day.

You may also concurrently employ other non-casual employees.  These are employees who are at least 18 but under 65 years of age and have been employed for a continuous period of 60 days or more.  They are generally known as "regular employees".  Enrolment and contribution requirements for regular employees are different from those for casual employees. Please click here for more information.

Choice of Scheme

As an employer in the construction or catering industry, you can choose to enrol your employees in an Industry Scheme or a Master Trust Scheme. The choice is yours. You may enrol your casual employees in an Industry Scheme and your regular employees in a Master Trust Scheme, or if you don’t want to participate in both types of schemes at the same time, you may enrol both your casual and regular employees in an Industry Scheme or both in a Master Trust Scheme.

While the choice rests entirely with you, be aware that for regular employees, the legislative requirements for enrolment, contribution and other obligations are the same whether you enrol them in an Industry Scheme or a Master Trust Scheme. Details on employer obligations for regular employees can be found here. However, for casual employees, the method of calculating contributions and other employer obligations are different. As Industry Schemes are designed for employers and employees in the construction and catering industries, they do offer more convenience for you. We will show you below the requirement differences between the two types of scheme to help you decide which type of scheme to join.

Enrolment Deadline

You should enrol your casual employees in an MPF scheme within the first 10 days of employment, regardless of the length of the employment period. This deadline is the same whether you choose to enrol your casual employees in an Industry Scheme or a Master Trust Scheme.

Note: If the 10th day of employment is a Saturday, a public holiday, a gale warning day or a black rainstorm warning day, the enrolment deadline is extended to end on the next following day which is not a Saturday, a public holiday, a gale warning day or a black rainstorm warning day.

Casual employees in the construction and catering industries can open casual employee accounts with each of the two Industry Scheme trustees in advance. The two trustees will each provide them with a “casual employee card”. If you have joined an Industry Scheme and your new casual employees have a casual employee account in the same scheme, you will not need to arrange enrolment for them anymore. Simply ask the employees to show you their “casual employee cards”, or to provide you with the account number/casual employee number printed on the cards. That’s all you need to make contributions for them.

There are currently two approved MPF trustees that operate Industry Schemes: Bank Consortium Trust Company Limited, and Bank of East Asia (Trustees) Limited. Their contact information can be found here.

If your casual employees have not opened an account in the same Industry Scheme you have joined, you must submit the completed enrolment form for your employees to the trustee of your Industry Scheme within the first 10 days of employment.

If you are participating in a Master Trust Scheme, you must ask your casual employees to fill in an enrolment form to enrol them into the scheme you have chosen.

Contribution Day

Contribution day is the deadline on which employers should make mandatory contributions for each contribution period (generally the wage period). As indicated in the table below, if you choose to enrol your casual employees in an Industry Scheme, you have two contribution day options whereas in a Master Trust Scheme, there is only one.

Casual Employees Contribution Day under
Industry Scheme
Contribution Day under
Master Trust Scheme
Daily-paid or Non-daily paid Next working day (other than a Saturday) after pay-day or the 10th day after each contribution period The 10th day after each contribution period
(or the 10th day after the contribution period in which the 10th day of employment falls if this is a later date)

Note: If the contribution day falls on a Saturday, a public holiday, a gale warning day or a black rainstorm warning day, the contribution day is extended to the next following day which is not a Saturday, a public holiday, a gale warning day or a black rainstorm warning day.

Given the two choices of contribution day offered under an Industry Scheme, you may wonder who would choose to make contributions on the next working day after pay-day, as employers will have just one working day to arrange payment. The reason behind such an arrangement is that if you choose to make contributions on the next working day, you will not be required to fulfil some obligations, including issuing monthly pay-records to your employees and keeping records. Please refer to the following sections for details.

Calculation of Contributions

Casual employees in the construction and catering industries are usually daily-rated. For instance, if a casual employee earns $1,000 per day, his total income for three working days is $3,000 ($1,000 x 3 days).

The length of casual employees’ contribution period may also be different. For instance, employees employed on a day-to-day basis are usually paid every day after work. Accordingly, their contribution period is one day. However, there are also cases where employees are paid less frequently, such as weekly or twice a month (once in the first half and again in the second half of the month).

In view of these differing income calculation and wage periods for casual employees, the contribution calculation method under Industry Schemes has been simplified and the contribution scales unified with effect from 1 November 2013. This has streamlined employers' calculation of contributions, and made it easier for your employees to understand how much should be deducted from their income for their part of contributions.


Under Industry Schemes

You should know that the method of calculating contributions for your casual employees differs, again depending on whether you have enrolled your casual employees in an Industry Scheme or a Master Trust Scheme. In respect of casual employees enrolled in an Industry Scheme, you should determine their contributions payable by referring to the contribution scale below and make fixed sum contributions according to their daily income, regardless of the length of their contribution period.  The contribution amounts are multiples of $5, making them simple and easy to remember.

Daily Relevant Income Amount of mandatory contributions
Employer's contributions Employee's contributions
Less than $280 $10 Not required
$280 to less than $350 $15 $15
$350 to less than $450 $20 $20
$450 to less than $550 $25 $25
$550 to less than $650 $30 $30
$650 to less than $750 $35 $35
$750 to less than $850 $40 $40
$850 to less than $950 $45 $45
$950 or more* $50 $50

* This income band contains the daily maximum relevant income level (i.e. $1,000) and the maximum amount of contribution (i.e. $50). If the daily relevant income of a casual employee exceeds $1,000, the amount of contribution payable by both the employee and his employer will remain at $50 each per day.

You simply check your casual employees’ daily income for each working day in the week against the new contribution scale, and then add up the contribution amount payable for each working day to arrive at the total contribution amount payable for that wage period. To better understand the contribution calculation method, please refer to the following illustrative example:
 
Mr Chan, a casual employee in the construction industry who has joined an Industry Scheme, is now being employed by a contractor at a construction site. His daily income is $1,200, or $600 per half day. His wage period is one week, meaning that he is paid on a weekly basis.
 
In one particular week, he and his employer are required to make MPF contributions as follows:

Working day Daily relevant income Applicable income band
under new contribution scale
Employer’s contributions Employee’s contributions
Monday $1,200 $950 or more $50 $50
Tuesday $1,200 $950 or more $50 $50
Wednesday
(No work) - Not required Not required
Thursday $1,200 $950 or more $50 $50
Friday $1,200 $950 or more $50 $50
Saturday $600
(half-day work)
$550 to less than $650 $30 $30
Sunday (No work) - Not required Not required
  Total Contribution payable:   $230 $230

Under the new contribution calculation method, Mr Chan’s employer can simply check his daily income for each day in the week against the new contribution scale, and then add up the contribution amount payable for each day to arrive at the total contribution amount payable for that wage period.

The new contribution calculation method and the unified contribution scale, effective from 1 November 2013, have been established on the basis that casual employees in the construction and catering industries are usually daily-rated. For a casual employee who is not daily-rated but is employed, for example, on a fixed weekly or monthly rate, calculate his/her average daily relevant income, then check it against the corresponding income band under the new contribution scale to determine the applicable daily contribution amount, and finally calculate the total contributions payable for the week or month. The methods for calculating average daily relevant income, daily contribution amount and total contribution amount are as below:

Average daily
relevant income =
Relevant income earned in a wage period
No. of working days in the wage period
 
Daily contribution
amount =
Check average daily relevant income against new contribution scale for contribution amount
 
Total contribution
amount =
[Daily contribution amount] x [No. of  working days in the wage period]


Example:
 
Ms Li normally works five days a week, and has a weekly income of $5,000. In a particular month, Ms Li worked five days in the first week, and two days in the second week. She thus earned only $2,000 in the second week. The contributions payable by Ms Li and her employer in respect of the two weeks are calculated as follows:

  First week Second Week
Weekly income $5,000 $2,000
Number of working days 5 2
Average daily relevant income
$1,000 ($5,000÷5 working days) $1,000 ($2,000÷2 working  days)
Daily contribution amount $50 (income falls in income band “$950 or more” under the new contribution scale) $50 (income falls in income band  “$950 or more” under the new contribution scale)
Employee’s contribution $250 ($50×5 working days) $100 ($50×2 working days)
Employer’s contribution $250 ($50×5 working days) $100 ($50×2 working days)
Total contribution amount $500 $200

Under Master Trust Schemes

If you choose to enrol your casual employees in a Master Trust Scheme, the method for calculating contributions is entirely different.

For casual employees with wages periods more frequent than monthly, such as weekly or half-monthly, you should first determine the minimum and maximum relevant income levels by multiplying the number of calendar days in the contribution period concerned by the daily minimum and maximum relevant income levels of $280 and $1,000.

For example, if your contribution period is half-monthly, i.e. you pay wages twice a month, the minimum relevant income level for the second half of March will be $280 x 16 calendar days = $4,480, and the maximum relevant income level will be $1,000 x 16 calendar days = $16,000.

Once you have calculated the minimum and maximum relevant income levels for a particular contribution period, you may then compare the actual relevant income of the casual employees earned during that contribution period and make contributions based on the following table:

Relevant income Mandatory contribution amount
Employer’s contributions Employee’s contributions
Less than
$280 x No. of calendar days in the contribution period concerned
Total relevant income in the contribution period concerned x 5% Not required
Between the minimum and maximum relevant income levels for the contribution period concerned Total relevant income in the contribution period concerned x 5% Total relevant income in the contribution period concerned x 5%
More than
$1,000 x No. of calendar days in the contribution period concerned
$1,000 x No. of calendar days in the contribution period concerned x 5% $1,000 x No. of calendar days in the contribution period concerned x 5%

For example, if your casual employee with a daily income of $1,000 worked 12 days in the second half of March, his total relevant income is: $1,000 x 12 days = $12,000. Since $12,000 falls between $4,480 and $16,000 (minimum and maximum relevant income levels for second half of March respectively), both employer’s and employee’s contributions should be $12,000 x 5% = $600.


Calculation of Contributions for Regular Employees

Some employees in the construction and catering industries are employed for a fixed period of 60 days or more (“regular employees”). Employers who choose to enrol their regular employees in an Industry Scheme should note that the contribution calculation method for regular employees is different from that for casual employees. The amount of mandatory contributions for regular employees is calculated based on 5% of their relevant income in respect of the contribution period concerned (the same as the contribution calculation method under Master Trust Schemes), subject to the minimum and maximum relevant income levels, i.e. $7,100 and $30,000 per month respectively. Details are as follows:

Monthly relevant income Mandatory contribution amount
Employer’s contributions Employee’s contributions
Less than $7,100 Relevant income x 5% Not required
$7,100 - $30,000 Relevant income x 5% Relevant income x 5%
More than $30,000 $1,500 $1,500

Illustrative example:
Mr Cheung is a regular employee in the construction industry. His daily income is $1,000, or $500 per half day. His contribution period is one month, meaning that he is paid once a month. Mr Cheung worked for 23.5 days in a particular month and his total income for that month was $23,500.
 
The table above shows that $23,500 falls in the income band “$7,100 to $30,000”. Therefore, Mr Cheung and his employer are each required to make MPF contributions of $1,175 ($23,500 x 5%).


Contribution Holidays

Unlike regular employees, the contribution holiday does not apply to casual employees regardless of whether they are enrolled in Industry Schemes or Master Trust Schemes. Both the employer’s mandatory contributions and the employee’s mandatory contributions shall be payable from the first day of employment.

Issuing Pay-records

Each contribution period, after remitting contributions to trustees, employers should also provide each casual employee with a pay-record within seven working days. The required information to be shown in this written record includes:
  • the amount of the employee’s relevant income;
  • the amounts of both employer’s and employee’s mandatory contributions;
  • the amounts of both employer’s and employee’s voluntary contributions, if any; and
  • the date on which contributions were paid to the trustee.
A sample of the pay record can be found here.

Under Industry Schemes

If you are participating in an Industry Scheme and have chosen to make contributions for your casual employees on the next working day after pay-day, you are not required to provide pay-records. This serves as an incentive for employers to make contributions earlier. However, if you choose to make contributions within 10 days after each contribution period, providing pay-records is still required.

Under Master Trust Schemes

If you are participating in a Master Trust Scheme, providing pay-records to your casual employees is mandatory.

Last Contribution

Your deadline for making the last payment of a departing employee’s mandatory contributions is the regular contribution day for the contribution period in which the employee’s employment is terminated, as shown in the table below.

  Industry Scheme Master Trust Scheme
Contribution day Next working day after pay-day The 10th day after each contribution period The 10th day after each contribution period
Deadline for making last contribution Next working day after the last pay-day The 10th day after the last contribution period The 10th day after the last contribution period

Notice of Termination 

If you have enrolled your casual employees in an Industry Scheme, you do not need to notify your trustee when your casual employees cease to be employed by you.

However, if you have enrolled your casual employees in a Master Trust Scheme, you should notify your trustee within 30 days after the employee’s termination.

There are two ways to notify your trustee of the departure date of your casual employees. You can notify your trustee in writing or by making use of the remittance statement.

In the remittance statement, there is usually a section designed for you to report termination of employment of your employees. Simply fill in the required information in that section, such as the name of the departing employee and his/her last day of employment, and send the remittance statement to your trustee along with the contributions.

Alternatively, you may also notify your trustee about the employee’s termination of employment through a written notice. Some trustees may have in place a Notice of Termination form for you to use. Please check with your trustee to find out about the proper procedures.

Keeping Records and Updating Information

If you have enrolled your casual employees in a Master Trust Scheme, you should keep proper record of certain MPF-related information. The following table summarizes the type of records you should keep and the corresponding periods of retention.

Type of Record Retention Period
Employee’s name, address and first day of employment At least 6 months after the employee terminates employment
Employee’s relevant income with breakdown* and dates on which payments were made

* Breakdown items include wages, salary, leave pay, fees, commissions, bonuses, gratuities, perquisites and allowances.
At least 6 months after making the said payments
Information contained in the remittance statement including the amount of each employee’s relevant income, amount of mandatory contributions (of both employer and employee) paid, and amount of voluntary contributions (of both employer and employee) paid, if any At least 7 years after the date of the remittance statement

If you have enrolled your casual employees in an Industry Scheme, the above record-keeping requirement is waived. This is another advantage of enrolling your casual employees in Industry Schemes.

Whether you are enrolled in an Industry Scheme or a Master Trust Scheme, you should also notify your trustee in writing within 30 calendar days of any changes to the following information about your company:
  • company name as shown on the Participation Certificate;
  • business address; or
  • telephone or fax number.
Some trustees do provide standard forms for you to report changes. Please enquire with your trustee for details.

Advantage of Enrolling Casual Employees in an Industry Scheme

As the Industry Schemes are designed to reduce the administrative burden of employers in the construction and catering industries, they do offer more convenience for employers compared to Master Trust Schemes. The following table summarizes the advantages offered by Industry Schemes:

  Industry Scheme Master Trust Scheme
Enrolment No enrolment by employer is required if casual employee already has an account in the same Industry Scheme Enrolment by employer is required
Contribution Simple contribution scale for determining contributions for casual employees More complex method of calculating contributions for casual employees
Pay-records No need to provide pay-records to casual employees if employer makes contributions on the next working day Provision of pay-record is required
Record-keeping No need to keep records of casual employees’ personal particulars, relevant income, remittance of contribution information, etc. Record-keeping is required

Common Misconceptions

Misconception 1: Employers who participate only in Master Trust Schemes are not required to make contributions for casual employees whose employment period is less than 60 days.

The kind of MPF scheme that an employer participates in is never a factor for determining whether or not his employees are covered by the MPF System. It is true that employers must enrol all full-time / part-time employees who are aged 18 to below 65 and employed for a period of 60 days or more in an MPF scheme and make contributions for them. However, this 60-day employment rule is not applicable to casual employees in the construction and catering industries. Employers in the construction and catering industries, regardless of whether they participate in Industry Schemes or Master Trust Schemes, must enrol their casual employees in an MPF scheme and make contributions for them.

Misconception 2: Casual employees in the construction and catering industries must set up their own accounts under the Industry Schemes in order to allow their employers to make contributions.

It is stated in the law that employers are obliged to enrol employees in MPF schemes and make contributions for them. If an employee does not have an account under the Industry Scheme that the employer has participated in, the employer is obliged to enrol the employee in that scheme and make contributions for him.

Misconception 3: All employers and employees in the construction industry and the catering industry are required to participate in the Industry Schemes.

Although Industry Schemes are specially designed for the construction and catering industries, the law does not require all employers in these two industries to join the Industry Schemes. They may opt for Master Trust Schemes that are designed for all trades and industries.

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