Beware rogue employers: short contracts do not excuse MPF defaults

This article is a rewrite of a report from February 2012.

Editor’s note: some characters in the original report were corrupted over time (the character for “employer” rendered as “?”) and have been conservatively reconstructed from context.

A security guard discovered his boss had skipped MPF contributions for months — a textbook case of gaming the MPF enrolment deadline 60 days rule. After reporting it, he learned that longer-serving colleagues had been made to sign successive short-term contracts over two years, while others were pushed into bogus self-employment. Every one of these tricks breaks the law.

How does the MPF enrolment deadline 60 days rule work?

The MPF enrolment deadline 60 days rule is measured by the employment relationship between employer and employee, not by actual working days or hours; rogue employers who issue back-to-back contracts of under 60 days in the belief that registration and contributions can be avoided are already breaking the law. Gaming the “legal loophole” does not work.

How can you spot bogus self-employment?

An employer cannot turn you self-employed by agreement alone: if the company exercises heavy control over your work — you cannot refuse assigned tasks, equipment and expenses are the company’s, and you bear none of its financial risk — all signs point to a genuine employment relationship, and the employer must contribute to MPF by law. Signing a “self-employment agreement” changes nothing when the work arrangement is unchanged.

What can you do about a rogue employer?

Report to the MPFA at once (hotline: 2918 0102); the vast majority of employers comply with the law and offenders are a minority, but wilful evasion of contributions is a serious offence, and the MPFA will refer cases with sufficient evidence to the Department of Justice and the police for criminal prosecution. Do not stay silent out of fear.