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Case 1 : How come I have another employer?

Case 1

Parties Involved :Ms Chan (cosmetologist)
Mr Ip (Sole-proprietor of Company A)

The Case

Ms Chan was employed as a cosmetologist by a beauty salon (Company A) operated by Mr Ip, who was the sole person in charge. Ms Chan said that she was employed by Mr Ip, who also arranged her jobs. Mr Ip did enrol her in an MPF scheme, but the enrollment was done three months after the prescribed period (i.e. the first 60 days of Ms Chan's employment). Ms Chan lodged a complaint with the MPFA stating that Mr Ip had deducted 5% from her wages every month for employee MPF contributions, but had never paid them to the MPF trustee, nor had he ever paid the employer's MPF contributions for her.

Investigation and Enforcement Action by MPFA

Upon receipt of Ms Chan's complaint, the MPFA started an investigation. The MPFA met with Mr Ip and requested that he provide the relevant documents. Mr Ip denied that he had employed Ms Chan and insisted that Ms Chan was employed by another company (Company B), which was solely owned by a Ms Chung from the Mainland. According to the information from Business Registration Office, both Company A and Company B had the same registered business address. The MPFA then found out that Ms Chung's registration had been completed only after the departure of Ms Chan from Company A. Moreover, it was found that Mr Ip had amended the date of employment in Ms Chan's MPF enrollment form to tie in with Ms Chung's registration date to make it seem as though Ms Chan had been hired by Ms Chung. It was obvious that Mr Ip had deliberately made the arrangement to shirk his liability and deprive Ms Chan of her legitimate MPF benefits. After seeking legal advice, the MPFA decided to prosecute Mr Ip for not enrolling Ms Chan in an MPF scheme within her first 60 days of employment and for not making the relevant contributions for her. In a court hearing, Mr Ip was convicted and sentenced to 60 hours of community service.

The magistrate's judgment pointed out that the court had the responsibility to send a clear message to the public that such offences were serious crimes. A sentence with a strong deterrent effect has to be imposed in order to combat such crimes.

Understanding MPFSO

Enrolling employees in an MPF scheme and making contributions for them on time
An employer must enrol both full-time and part-time employees aged from 18 to below 65 in an MPF scheme within the first 60 days of employment (except for certain exempt persons1).

Under the MPF Scheme Ordinance, Industry Schemes have been established for casual employees (any person employed by an employer on a day-to-day basis or a fixed period of less than 60 days) in the catering and construction industries. Employers are required to enrol their casual employees in an MPF scheme and make contributions for them even if the employment period is only one day.

Employers who fail to enrol their employees in an MPF scheme within the first 60 days of employment commit an offence and are liable to a maximum fine of $350,000 and imprisonment for three years.

1Exempt persons include domestic employees, self-employed hawkers, people covered by statutory pension or provident fund schemes, members of occupational retirement schemes which are granted MPF exemption certificates (ORSO schemes), people from overseas who enter Hong Kong for employment for less than 13 months, or who are covered by overseas retirement schemes, and employees of the European Union Office of the European Commission in Hong Kong.

Last Revision Date: 20/12/2012