Do part-time employees need to make MPF contributions? Do employers have to enrol employees into an MPF scheme if they are employed less than 60 days? Do employers need to make MPF contributions for employees starting from the first day of employment?
Whether you are an employer or an employee, you may have thought about questions like these before. The important question, though, is how well do you know your MPF rights and obligations? As an employer, you need to fully understand and comply with the requirements of the MPF legislation so as not to breach the law. As an employee, understanding the legislation ensures that you are better able to protect your rights and recognize when your employer has not met its MPF responsibilities. Test your knowledge below with some of the most commonly asked questions regarding MPF regulations.
1.
Do employers need to enrol their part-time employees in an MPF scheme and make contributions if their employment period is not less than 60 days?
Yes No
û You are wrong!
ü You are right!
MPF Regulations That You Should Know:
Employers have to enrol their part-time employees in an MPF scheme if employment relationships exist between them for 60 days or more, regardless of the actual number of days or hours the part-time employees have worked.
Friendly Reminder:
If an employee has two part-time jobs and the employment period for each job exceeds 60 days, both of his employers have to enrol him in an MPF scheme and make contributions. Any employer failing to do so is liable to prosecution1.
The employee therefore will have two MPF contribution accounts at the same time.
Remark: 1 Employers who default MPF contributions or fail to enrol their employees in an MPF scheme are subject to a maximum fine of $350,000 and three years’ imprisonment. Employers who fail to remit employees’ MPF contributions deducted from the employees’ income to the trustees concerned are subject to a maximum fine of $450,000 and four years’ imprisonment.
2.
If an employer repeatedly signs short-term employment contracts of less than 60 days with an employee to replace a long-term contract, does the employer still need to enrol the employee in an MPF scheme and make contributions?
Yes No
û You are wrong!
ü You are right!
MPF Regulations That You Should Know:
Even if each employment contract lasts for less than 60 days, if there is evidence of an employment relationship existing for 60 days or more, the employer must enrol the employee in an MPF scheme.
Employers who have enrolled in the Industry Schemes are required to make contributions for their casual employees even if the employment period is only one day.
Friendly Reminder:
Employers should not sign repeated contracts of less than 60 days with employees with the intention of evading their MPF responsibilities. Any employer committing such an offence is liable to prosecution1.
Remark: 1 Employers who default MPF contributions or fail to enrol their employees in an MPF scheme are subject to a maximum fine of $350,000 and three years’ imprisonment. Employers who fail to remit employees’ MPF contributions deducted from the employees’ income to the trustees concerned are subject to a maximum fine of $450,000 and four years’ imprisonment.
3.
Do both employers and new employees enjoy the contribution holiday?
Yes No
û You are wrong!
ü You are right!
MPF Regulations That You Should Know:
An employee is not required to make the employee's portion of contributions for the first 30 days of a new employment and the following incomplete payroll cycle (i.e. the "contribution holiday"). For example, if an employee starts his new job on 19 June, he does not need to make his employee’s portion of the contribution until 1 August, as the contribution holiday includes the period from 19 June to 18 July (i.e. for the first 30 days of employment) and from 19 to 31 July (the following incomplete payroll cycle).
However, the employer is not entitled to a contribution holiday and is required to calculate and make the employer's contributions from the employee's first day of employment. The "contribution holiday" is also not applicable to employers or employees in the Industry Schemes. Even if the employment period is just one day, the employer still has to make contributions for its causal employees.
Friendly Reminder:
Only employees are entitled to enjoy the contribution holiday according to MPFSO, i.e. they do not need to make MPF contributions for the first 30 days of employment and the following incomplete payroll cycle.
If the employer does not calculate and make the employer's contributions from the employee's first day of employment, the outstanding contributions are regarded as defaulted contributions and the employer is liable to prosecution1.
Employees should check to ensure their employer has calculated and made the employer's contributions from their first day of employment, and also to ensure the employees' contributions are calculated and deducted after the contribution holiday (if applicable).
Remark: 1 Employers who default MPF contributions or fail to enrol their employees in an MPF scheme are subject to a maximum fine of $350,000 and three years’ imprisonment. Employers who fail to remit employees’ MPF contributions deducted from the employees’ income to the trustees concerned are subject to a maximum fine of $450,000 and four years’ imprisonment.
4.
When the employer calculates the employer's and employees' contributions, should commission and allowance be included in the calculation?
Yes No
û You are wrong!
ü You are right!
MPF Regulations That You Should Know:
The contributions of both the employer and the employee are calculated based on the employee's "relevant income". Relevant income refers to all payments expressed in monetary terms paid or payable by an employer to an employee (directly and indirectly), including:
wages;
salary;
leave pay;
fees;
commissions;
bonuses;
gratuities; and
perquisites or allowances (including a housing allowance or other housing benefits).
Relevant income excludes, however, severance payment and long service payment under the Employment Ordinance.
Friendly Reminder:
If commission, allowance (except reimbursable allowance), etc., are not included in the relevant income when calculating the contributions, the outstanding contributions in respect of the shortfall in the amount of relevant income may be regarded as defaulted contributions1.
Also, any employer providing false information regarding the employees' relevant income commits an offence and is liable to prosecution2.
Remarks: 1 Employers who default MPF contributions or fail to enrol their employees in an MPF scheme are subject to a maximum fine of $350,000 and three years’ imprisonment. Employers who fail to remit employees’ MPF contributions deducted from the employees’ income to the trustees concerned are subject to a maximum fine of $450,000 and four years’ imprisonment.
2 Employers providing false or misleading information to trustees are subject to a maximum fine of $100,000 and imprisonment for one year.
5.
When the employer submits the contributions to the trustee, what other documents should be submitted?
Remittance statement Notice of participation
û You are wrong!
ü You are right!
MPF Regulations That You Should Know:
In addition to calculating the employer's and employees' contributions every month, the employer should also complete a remittance statement setting out each employee’s relevant income and amount of contributions, and remit it together with the contributions to the trustee.
Friendly Reminder:
If an employee has no relevant income for the month, the employer has to mark "0" on the remittance statement. Otherwise, the trustee will regard the missing contributions in respect of that employee as defaulted contributions.
Any employer who does not submit the remittance statement is liable to a financial penalty1. Any employer providing false information in the remittance statement commits an offence and is liable to prosecution2.
Remarks: 1 The financial penalty for the first failure is $10,000. The maximum financial penalty for subsequent failure is $50,000.
2 Employers providing false or misleading information to trustees are subject to a maximum fine of $100,000 and one year’s imprisonment.
6.
Can the employer make the contributions to the trustee at any time?
Yes No
û You are wrong!
ü You are right!
MPF Regulations That You Should Know:
The employer must submit the contributions and the duly completed remittance statement to the trustee for his / her regular employees on or before the 10th day of each relevant month, which is the "contribution day".
If the employer chooses to make the contributions by post, sufficient mailing time should be allowed to avoid any mailing delay.
Friendly Reminder:
Any employer who fails to make the contributions on or before the prescribed contribution day (i.e. the 10th day of each month) is liable for payment of the outstanding contributions, a 5% surcharge, a financial penalty of $5,000 or above or prosecution1.
Remark: 1 Employers who default MPF contributions or fail to enrol their employees in an MPF scheme are subject to a maximum fine of $350,000 and three years’ imprisonment. Employers who fail to remit employees’ MPF contributions deducted from the employees’ income to the trustees concerned are subject to a maximum fine of $450,000 and four years’ imprisonment.
7.
Can the employer use pay-slips as pay-records?
Depends on different cases Certainly not
û You are wrong!
ü You are right!
MPF Regulations That You Should Know:
The employer should provide each employee with a pay-record within seven working days after the contributions are made. The record should contain information such as the employee’s relevant income, the respective amounts of employer's and employee's mandatory contributions, as well as the date on which contributions were made. The amounts of voluntary contributions, if any, should also be set out in the contribution records.
Pay-slips listing all the above information can be treated as contribution records.
Friendly Reminder:
Any employer who fails to provide pay-records to employees (except for casual employees under Industry Schemes) is liable to a financial penalty1. A pay-record should include the following information:
i. amount of relevant income of the employee;
ii. amount of employee’s mandatory contributions and voluntary contributions (if any) deducted;
iii. amount of employer’s mandatory contributions and voluntary contributions (if any) paid; and
iv. date on which the employer paid the contributions to the scheme trustee.
Pay-slips including all the above information can be treated as pay-records.
Remark: 1 The financial penalty for the first failure is $10,000. The maximum financial penalty for subsequent failure is $50,000.
8.
When an employee ceases employment, other than making the last contributions on time, does the employer need to inform the trustee?
Yes No
û You are wrong!
ü You are right!
MPF Regulations That You Should Know:
When an employee ceases employment, apart from making the final contributions on time, the employer should notify the trustee of the employee's date of cessation of employment through the monthly remittance statement or a written notice on or before the next contribution day.
Friendly Reminder:
An employer must notify the trustee of an employee's cessation of employment through the remittance statement for the month of cessation or through a written notice on or before the next prescribed contribution day. Failure to do so will incur a financial penalty1.
If the trustee has not been notified of the employee's cessation of employment (except for causal employees under Industry Schemes), the trustee may report this to MPFA and regard the missing contributions in respect of that employee as defaulted contributions2.
Remarks: 1 The financial penalty for the first failure is $5,000 and the maximum financial penalty for subsequent failure is $20,000.
2 Employers who default MPF contributions or fail to enrol their employees in an MPF scheme are subject to a maximum fine of $350,000 and three years’ imprisonment. Employers who fail to remit employees’ MPF contributions deducted from the employees’ income to the trustees concerned are subject to a maximum fine of $450,000 and four years’ imprisonment.
9.
Is an employer no longer required to make contributions after changing an employee's status to "self-employed person"?
Yes No
û You are wrong!
ü You are right!
MPF Regulations That You Should Know:
Self-employment is not simply based on an agreement between the employer and the employee, or the signing of a "self-employed contract". It depends on whether an actual employment relationship exists between the two parties.
For example, if after an employee changes his status to "self-employed person", the company still has considerable control over the employee's work. The work is still assigned and arranged by the company, the employee still must wear specified uniforms during working hours and follow company regulations, and the facilities and expenses are all arranged and paid by the company, etc. Under these circumstances, it is regarded as false self-employment. The employment relationship has not been changed and the employer still has to make contributions for the employee.
Friendly Reminder:
Any employer who asks an employee to change his status to "self-employed person" in order to evade its MPF responsibilities and fails to enrol him in an MPF scheme or to make contributions for him thereafter commits an offence and is liable to prosecution1.
Remark: 1 Employers who default MPF contributions or fail to enrol their employees in an MPF scheme are subject to a maximum fine of $350,000 and three years’ imprisonment. Employers who fail to remit employees’ MPF contributions deducted from the employees’ income to the trustees concerned are subject to a maximum fine of $450,000 and four years’ imprisonment.
10.
Is the employer required to keep records of MPF-related documents?
Yes No
û You are wrong!
ü You are right!
MPF Regulations That You Should Know:
The employer is required to keep a proper record of the information related to employees and the MPF scheme for seven years, including the names of employees, their correspondence addresses, dates of employment, relevant income, amounts of MPF contributions and contribution dates.
Friendly Reminder:
Any employer who does not keep proper records of its employees and their MPF matters is liable to prosecution1.
Remark: 1 The maximum fine for failure to maintain proper MPF-related records is $25,000.
11.
Can a scheme member apply for early withdrawal of accrued benefits on grounds of permanent departure from Hong Kong, even if the departure is just temporary?
Yes No
û You are wrong!
ü You are right!
MPF Regulations That You Should Know:
A scheme member who plans to depart from Hong Kong temporarily cannot apply for early withdrawal of accrued benefits on the ground of "permanent departure from Hong Kong".
When a scheme member applies for early withdrawal of accrued benefits for such a reason, he has to provide relevant evidence to the trustee, including a statutory declaration of permanent departure from Hong Kong and evidence, accepted by the trustee, proving that the scheme member is permitted to reside at a place outside Hong Kong.
Friendly Reminder:
Any scheme member who makes a false statement to the trustee for early withdrawal of accrued benefits on grounds of permanent departure from Hong Kong, but in fact has no intention to depart Hong Kong permanently, is liable to prosecution1.
Remark: 1 Scheme members who provide false or misleading information for early withdrawal of accrued benefits are subject to a maximum fine of $100,000 and one year’s imprisonment.
12.
Can a scheme member apply for early withdrawal of accrued benefits on grounds of permanent departure from Hong Kong more than once?
Yes No
û You are wrong!
ü You are right!
MPF Regulations That You Should Know:
A scheme member is allowed to apply for early withdrawal of accrued benefits on the ground of permanent departure from Hong Kong only once in a lifetime.
Friendly Reminder:
When the trustee receives an application from a scheme member for early withdrawal of accrued benefits on such ground, the trustee will verify with MPFA, to see if the scheme member was paid accrued benefits on the same ground previously.
Any scheme member who applies for early withdrawal on such grounds more than once and makes a false statement commits an offence. The MPFA will prosecute the offenders1.
Remark: 1 Scheme members who provide false or misleading information for early withdrawal of accrued benefits are subject to a maximum fine of $100,000 and one year’s imprisonment.
