MPF default contributions: habitual offenders face fines up to HK$50,000

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

Many employers assume late MPF contributions can be quietly made up with no consequences. In February 2012 the MPFA moved against exactly that mindset, announcing new penalties from the third quarter: even employers who eventually make full restitution will be fined up to HK$50,000.

Who are the “rogue employers”?

The MPFA uses the term for habitual offenders who contribute, file records or notify trustees of departures only when prosecution looms — not because they cannot pay, but because it is their habit. Its chief operating officer (enforcement) said such employers typically pay up only after the authority follows up on a complaint, with some even relying on the MPFA to correct their errors — a drain on manpower and administrative resources.

How do the new penalties work?

From the third quarter of 2012, three violations of this kind within three years attract fines of HK$5,000 to HK$50,000 — even if the employer makes full restitution and no arrears remain. That is far heavier than the average HK$3,000 fine for a single default case. The authority noted the penalties were already in law; it had simply prioritised recovering members’ money first, and had never taken civil or criminal action against such employers.

Which industries draw the most complaints?

In the first nine months of 2011/12 the MPFA received 3,243 complaints, down 9% year on year, with full-year complaints projected at about 4,200; it issued 1,296 summonses against 129 employers or directors, averaging HK$29,300 per employer. Catering (26%), construction (22%) and wholesale/retail (14%) topped the list. In late 2011 a defaulting employer received the first-ever 60-hour community service order, sharpening deterrence; the minimum wage’s introduction had not worsened defaults.

The MPFA has published an online blacklist of defaulting employers since May 2011, now holding 3,775 records with 26 repeat offenders. Employers can review their obligations in the MPF education guides.