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The Mandatory Provident Fund Schemes Authority (MPFA) today (January 24) successfully prosecuted a jewellery manufacturing company at Kwun Tong Magistracy for evading its MPF contributions by setting aside and labelling part of an employee's salary as housing allowance.
The MPFA had in the past prosecuted employers for evading MPF contributions by labelling part of an employee's income as housing allowance, and all the defendants pleaded guilty to the charges. This was the first case in which the defendant pleaded not guilty to the charges, and was convicted after trial for evading MPF contributions by labelling part of an employee's income as housing allowance.
After hearing the case, the Magistrate found the defendant, Tobylight Jewellery Manufacturing Limited, guilty of not making MPF contributions based on employees' full relevant incomes, setting aside part of the employee's incomes as housing allowance where the employee had in fact no housing expenses. The defendant was fined a total of $2,100.
The defendant, Tobylight Jewellery Manufacturing Limited (BR No.21284457), was prosecuted for failing to make MPF contributions of $1,900 over seven months' contribution periods from April 1 to October 31, 2004 in respect of $19,000 of the employee's relevant income, which was labelled as housing allowance.
Upon receiving the complaint, the MPFA immediately conducted an investigation into the case. Having gathered sufficient evidence and consulted the Department of Justice, the MPFA decided to charge the defendant with seven counts of contravening the Mandatory Provident Fund Schemes Ordinance. The defendant was fined $300 for each of the seven summonses, totalling $2,100.
An MPFA spokesperson said, "The MPFA welcomes the Magistrate's ruling which, we believe, will help to deter employers from evading MPF responsibilities by labelling part of the employee's relevant income as housing allowance."
The MPFA reminded employers not to abuse housing allowance exemption to evade their MPF responsibilities.
The spokesman stressed that the MPFA will continue to strengthen action against employers who try to evade MPF responsibilities under the pretext of housing allowance. Employees are encouraged to report similar cases to the MPFA hotline at 2918 0102 and to act as prosecution witnesses to protect their own MPF benefits and rights.
Meanwhile, the Mandatory Provident Fund Schemes Authority (MPFA) today pursued two claims in the Small Claims Tribunal for some $58,000 on behalf of four employees, who were owed MPF contributions by their employers.
At today's hearing, the defendant, Lam Yeung Ching trading as Chuen Kee Restaurant, did not dispute the amount claimed. The Adjudicator ordered it to pay the MPFA the sum of $27,469.49, being mandatory contributions in arrears and surcharge payable.
The other defendant, Creative Glory Limited, did not appear at today's hearing. In its absence, the Adjudicator ordered it to pay the MPFA the sum of $29,943.27, being mandatory contributions in arrears and surcharge payable.
The amounts awarded will be reimbursed to the employees' MPF accounts as soon as they are received by the MPFA. The court further awarded payments of $300 and $240 as the costs in respect of the claims.
Creative Glory Limited pleaded guilty at Kwun Tong Magistracy earlier to seven counts of failing to make MPF contributions on time after making deduction from the income of an employee, and was fined $17,000.
Ends/Tuesday, January 24, 2006
Issued at HKT 17:49
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