Common Misconceptions

Common Misconceptions

In the course of making MPF arrangements for your employees, you may come across issues that may not be clear to you. To avoid making a misstep and contravening the law, take a look at the following issues and make sure you are complying accordingly.

Part-time employees

Misconception: I don’t have to arrange MPF enrolment for my employees who do not fulfill the “418” rule under the Employment Ordinance.

Under the Employment Ordinance, an employee who has been employed continuously by the same employer for four weeks or more, with at least 18 hours worked in each week, is regarded as being employed under a “continuous contract” and is entitled to some benefits, such as one rest day in every period of seven days.

MPF enrolment, however, is not subject to the “418” rule. The MPF System covers both full-time and part-time employees. No matter how many hours of work your employees perform in a week, as long as they have been employed for 60 days or more, you are required to enrol them into an MPF scheme and make contributions.

Multiple employment contracts of less than 60 days

Misconception: I can sign a series of short-term employment contracts of less than 60 days with my employees so that no MPF enrolment is necessary.

Despite the fact that the employment period of each employment contract is less than 60 days, if there is evidence that an employment relationship between you and your employees exists for 60 days or more, you are still required to enrol your employees in an MPF scheme.

Changing employees to self-employed persons

Misconception: If I change my employees into self-employed persons by signing a written contract for service with them, I am no longer required to arrange MPF enrolment for them.

No. Self-employment is not simply based on an agreement between you and your employees, or the signing of a “self-employed” contract. It depends on whether an actual employment relationship exists between the two parties. For example, after an employee changes to a 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 company still requires the employee to wear specified uniforms during working hours and to follow company regulations; 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 arrange MPF enrolment for the employee.

Employee’s request not to join MPF

Misconception: If my employees do not want to join MPF, I don’t have to enrol them in an MPF scheme.

It is clearly written in the law that an employer has the legal obligation to enrol employees into an MPF scheme. Mutual agreement between you and your employee, or even a request proactively raised by your employee to do without MPF, does not override your obligation to enrol them.

Handling MPF contributions

Misconception: I posted the cheque to the trustee on the contribution day, so I have not delayed in paying contributions.

Employers should allow sufficient mailing time to ensure that the payment cheque and remittance statement are delivered to the trustee on or before the contribution day. Please note that the postmark date on the envelope will not be considered as the date of payment.

For other points-to-note on making contributions, please refer to the Employers’ Common Misconceptions in Handling MPF Contributions.