Employment

Contract

Remittance

StatementJanuary

Friendly Reminder: Any scheme member who makes a false statement to the trustee for early withdrawal of accrued benefits on the ground of “permanent departure from Hong Kong”, but in fact has not departed Hong Kong permanently, is liable to prosecution6.

Friendly Reminder: Any employer who asks an employee to change to a “self-employed person” in order to evade its MPF responsibilities commits an offence and is liable to prosecution1.

MPF Regulations That You Should Know: No. 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, 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 make contributions for the employee.

MPF Regulations That You Should Know: Yes. The employer is required to keep a proper record of the information related to employees and the MPF scheme(s) for seven years, including the names of employees, their correspondence addresses, dates of employment, “relevant income”, amounts of MPF contributions and contribution dates.

MPF Regulations That You Should Know: No. 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: The MPFA has kept a register of all applicants for early withdrawal of accrued benefits on the ground of “permanent departure from Hong Kong”. When the trustee receives an application from a scheme member for early withdrawal of accrued benefits on such ground, the trustee will verify with the MPFA.

Any scheme member who applies for early withdrawal on such ground more than once and makes a false statement commits an offence. The MPFA will prosecute the offenders6.

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MPF Regulations That You Should Know: Yes. When an employee ceases employment, apart from making the last 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”.

8.

Agreement

Friendly Reminder: Any employer who fails to notify the trustee through the remittance statement at the month of cessation or through a written notice on or before the next “contribution day” is liable to a financial penalty4.

If the trustee has not been notified of the employee’s cessation of employment, the trustee may report this to the MPFA and regard the case as defaulted contributions1.

MPF Regulations That You Should Know: No. 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 on such ground, 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.

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 imprisonment for three years.2. Employers providing false or misleading information to trustees are subject to a maximum fine of

$100,000 and imprisonment for one year.3. The financial penalty for the first failure is $10,000 and the maximum financial penalty for

subsequent failure is $50,000.4. The financial penalty for the first failure is $5,000 and the maximum financial penalty for

subsequent failure is $20,000.5. The maximum fine is $25,000.6. Scheme members who provide false or misleading information for early withdrawal of accrued

benefits are subject to a maximum fine of $100,000 and imprisonment for one year.

To learn more about the MPF rights and obligations of employers and employees, please read the MPFA publications “MPF 7 Smart Tips for Smart Employers”, “What Employees Should Know about MPF?”, “MPF Industry Schemes” and “MPF Rights of Part-Time Employees”, or visit the MPFA website to obtain the relevant information.

Friendly Reminder: Any employer who does not keep proper records of its employees and the MPF scheme(s) is liable to prosecution5.

Question: Is the employer required to keep records of MPF-related documents?

Question: Is an employer no longer required to make contributions after changing an employee’s status to “self-employed person”?

Question: Can a scheme member apply for early withdrawal of accrued benefits on the ground of “permanent departure from Hong Kong” more than once?

Question: Can a scheme member apply for early withdrawal of accrued benefits on the ground of “permanent departure from Hong Kong”, even if the departure is just temporary?

Question: When an employee ceases employment, other than making the last contributions on time, does the employer need to inform the trustee?

How to define the “contribution holiday”?

Do short-term

contract employees

need to make MPF

contributions?

Which day is the

“contribution day”?

How to calculate the “relevant income”?

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2011

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EN

F(E

)

August 2011

Hotline: 2918 0102Fax: 2259 8806Website: www.mpfa.org.hk

Employment

Contract

January

Remittance

Statement

Friendly Reminder: If an employee has two part-time jobs, both of his employers have to enrol him in an MPF scheme and make contributions. Any employer who does not is liable to prosecution1.

The employee, therefore, will have two MPF contribution accounts at the same time.

Friendly Reminder: Any employer who fails to provide contribution records to employees is liable to a financial penalty3.

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 it as defaulted contributions.

Any employer who does not submit the remittance statement is liable to a financial penalty3. Also, any employer providing false information in the remittance statement commits an offence and is liable to prosecution2.

Friendly Reminder: If an employer does not include commission, allowance, etc. in the “relevant income” when calculating the contributions, meaning it is contributing less than the required amount, it is regarded as defaulted contributions1.

Also, any employer providing false information regarding the employees’ “relevant income” commits an offence and is liable to prosecution2.

Friendly Reminder: If the employer does not calculate and make the employer’s contributions from the employee’s first day of employment, it is 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).

Friendly Reminder: Employers should not sign repeated contracts of less than 60 days with employees with the intention of escaping from their MPF responsibilities. Any employer committing such offence is liable to prosecution1.

MPF Regulations That You Should Know: No. The employer must submit the contributions and the duly completed remittance statement to the trustee on or before the 10th day of each relevant month (i.e. on or before the “contribution day”).

If the employer chooses to make the contributions by post, sufficient mailing time should be allowed to avoid any mailing delay.

Do part-time employees need to make MPF contributions? Do employers have to enrol the employees into an MPF scheme if the employment period is less than 60 days?

Do employers need to make the MPF contributions for the employees starting from the first day of employment?

Regardless of whether you are an employer or an employee, have any of these questions crossed your mind? Are you fully aware of your MPF rights and obligations? As an employer, you have to fully understand and comply with the requirements of the MPF legislation so as not to breach the law. As an employee, in order to protect your rights, you can take on a monitoring role to determine whether your employer has fulfilled its MPF responsibilities. This leaflet sets out some common issues regarding the MPF regulations in Q & A format to help you strengthen your MPF knowledge.

MPF Regulations That You Should Know: Yes. Employers have to enrol their part-time employees in an MPF scheme as long as an employment relationship between the employer and the employee exists for 60 days or more, regardless of the actual number of working days and hours the part-time employees have worked.

MPF Regulations That You Should Know: Yes. 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 the employer and the employee exists 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.

MPF Regulations That You Should Know: No. An employee in new employment does not need to make the employee’s contributions for the first 30 days of employment and the following incomplete payroll cycle (i.e. the “contribution holiday”). For example, if an employee starts his new employment on 19 June, he does not need to make a contribution for the first 30 days of employment (i.e. from 19 June to 18 July) and the following incomplete payroll cycle (i.e. from 19 to 31 July).

However, the employer is required to calculate and make the employer’s contributions from the employee’s first day of employment.

The “contribution holiday” is not applicable to employers and employees in the Industry Schemes. Even if the employment period is just one day, the employer still has to make contributions for its employees.

MPF Regulations That You Should Know: Apart from calculating the employer’s and employees’ contributions every month, the employer should complete a remittance statement setting out the “relevant income” and the accurate amount of contributions in respect of each employee, and remit it together with the contributions to the trustee.

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MPF Regulations That You Should Know: The employer should provide each employee with a contribution record within 7 working days after the contributions are made. The record should contain information including the amount of “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.

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Friendly Reminder: Any employer who fails to make the contributions on or before the “contribution day” is liable to payment of the outstanding contributions, a 5% surcharge and prosecution1.

MPF Regulations That You Should Know: Yes. 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, including wages, salary, leave pay, fee, commission, bonus , gratiuity, perquisite or allowance (including housing allowance or other housing benefits), but excluding severance payment and long service payment under the Employment Ordinance.

Question: Do employers need to enrol their part-time employees in an MPF scheme and make contributions?

Question: 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 need to enrol the employee in an MPF scheme and make contributions?

Question: Do both employers and new employees enjoy the “contribution holiday”?

Question: Can the employer make the contributions to the trustee at any time?

Question: When the employer calculates the employer’s and employees’ contributions, should commission and allowance be included in the calculation?

Question: When the employer submits the contributions to the trustee, what other documents should be submitted?

Question: Can the employer use the “pay-slips” as contribution records?