Employment ❘ 157
Protection of Wages on Insolvency Fund
The Protection of Wages on Insolvency Fund is financed by an annual levy, increased to $600 with effect from May 2002 on each business registration certificate. Employees who are owed wages and other employment termination. benefits by insolvent employers may apply to the fund for ex gratia payment.
The fund covers arrears of wages not exceeding $36,000 accrued during a period of four months preceding the applicant's last day of service; wages in lieu of notice for termination of employment up to $22,500 or one month's wages, whichever is less; and severance payment up to $50,000 plus 50 per cent of any entitlement in excess of $50,000.
As Hong Kong's economy further improved, the number of applications for the fund continued to drop. The number of applications decreased from 22 350 in 2003 to 13 631 in 2004, a substantial drop of 39 per cent. The fund recorded an average monthly surplus of $4.08 million in 2004 and registered a surplus of $49 million by year-end, the first year that the fund recorded a surplus since the Asian financial crisis. in 1997. In 2004, the fund disbursed a total of $381.5 million to 19 062 eligible applicants.
Employees' Rights and Benefits
The Employment Ordinance provides for various employment-related benefits and entitlements for employees. On top of the statutory requirements, employers and employees are free to negotiate on the terms and conditions of their employment.
Since December 2000, all relevant employers have to enrol their employees in Mandatory Provident Fund (MPF) schemes in accordance with the Mandatory Provident Fund Schemes legislation. The participation rate of the relevant employers in MPF schemes, which are regulated by the Mandatory Provident Fund Schemes Authority, reached 97.9 per cent by year-end.
Labour Conditions
The employment of children under the age of 15 is generally prohibited. Subject to stringent requirements, children aged 13 and 14 may be employed in non- industrial establishments. Young persons aged 15 to 17 may work in industrial establishments, subject to regulations governing their employment conditions. Specific provisions under labour legislation protect their safety, health and welfare.
Labour inspectors conduct rigorous workplace inspections to monitor employers' compliance with the various provisions of labour legislation to safeguard the statutory rights and benefits of local and imported workers, and to ensure that employers possess valid insurance policies covering their liabilities for work injuries of their employees. Labour inspectors also check employees' proof of identity to help combat illegal employment. In 2004, the Labour Department netted 760 illegal workers and 196 employers suspected of employing illegal workers, up 55 per cent and 128 per cent respectively from 2003.