'Two-tier penalty system an effective deterrent'

Unionist lawmaker Lam Chun-sing on Thursday said the two-tier surcharge penalty could have a deterrent effect on employers and encourage them to make timely MPF contributions. His remarks came as the Mandatory Provident Fund Schemes Authority recently proposed a new surcharge on employers who fail to settle outstanding MPF contributions. Speaking on RTHK's Backchat programme, Lam said the authority had issued about 400,000 payment notices to employers in 2024, who had failed to settle outstanding MPF contributions on time, and the number had increased every year. He emphasised that most employers were able to make timely MPF contributions, but sometimes these were delayed due to various reasons. He pointed out that some notices were issued to businesses in the catering and construction sectors, who failed to pay on time due to difficulties with their financial situations. "For example, the construction industry, some of the employers cannot receive the payment on time from the contractor, so they may delay the MPF contribution for their workers," Lam said. He said the goal of increasing the surcharge is to encourage these employers to make contributions and have a deterrent effect. He noted the two-tier system only targets those who delay their MPF contribution to employees despite receiving a payment notice from the authority. "We hope the increase in the charge can encourage employers to pay the MPF contribution on time and protect the interests of their employees," he said. He added there will be more consultations with the business sector to refine the proposal and ensure its effectiveness. Edited by Tony Sabine