ENG-2007 — Page 186

138 | Employment

Protection of Wages on Insolvency Fund

The Protection of Wages on Insolvency Fund provides ex gratia payment to employees who are owed wages and other termination benefits by insolvent employers. It is financed by a levy imposed on each business registration certificate. 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 of up to $22,500 or one month's wages, whichever is less; and severance payment of up to $50,000 plus 50 per cent of any entitlement in excess of $50,000.

As a result of the economy's continuing improvement and the Labour Department's all-out efforts in combating wage defaults, the number of applications for the fund fell from 7 532 in 2006 to 4 836 in 2007, the lowest since 1990. The fund's financial position also improved showing a surplus of $442 million in 2007. During the year, the fund paid out $95 million to 4 913 applicants.

Employees' Rights and Benefits

The Employment Ordinance provides for various employment-related benefits and entitlements to employees. Apart from statutory requirements, employers and employees are free to negotiate the terms and conditions of their employment.

Since December 2000, all employers have had to enrol their employees in Mandatory Provident Fund schemes. At the end of the year, 99.5 per cent of employers had joined the schemes, which are regulated by the Mandatory Provident Fund Schemes Authority.

Labour Conditions

The employment of children under 15 is generally prohibited by law. Subject to stringent rules, children aged 13 and 14 may be employed in non-industrial establishments. Young people aged between 15 and 17 may work in industrial establishments, subject to regulations governing their employment conditions. Specific provisions under labour legislation protect workers' safety, health and welfare.

Labour inspectors conduct rigorous workplace inspections to monitor employers' compliance with the various provisions stipulated in labour laws to safeguard the statutory rights and benefits of local and imported workers, and to ensure that employers possess valid employees' compensation insurance policies. Labour inspectors also check employees' proof of identity during workplace inspections and work with the Police and the Immigration Department to combat illegal employment. In 2007, some 170 joint operations were conducted. The department also publicised widely the complaint hotline (2815 2200) to encourage people to report illegal employment activities.

Companies providing services to the Government under service contracts which rely heavily on the deployment of non-skilled workers are required to sign a standard employment contract with the workers. The contract, which sets out the employment terms, helps safeguard the rights and benefits of the non-skilled workers.