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Are companies allowed to reduce the owed severance by subtracting MPF contributions?

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  1. #11

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    Voluntary contributions are/can be subject to a vesting scale based on number of years of service, a bit like ORSO. For example, if a company elected to pay 30% of ORSO/MPF to staff after completion of 3 years of service, 40% after 4 years and so forth, then if a staff leaves before 3 years are up, they are not entitled to any portion of the employers' voluntary contributions, if they leave within the fourth year, then they can get 30% whilst the employer gets back 70% of the voluntary contributions.


  2. #12

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    This is a contractual issue - nothing to do with the law.


  3. #13

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    Our MPF Provider is Manulife, The employee signs a form stating that all his/her dues have been settled and after 2-4 weeks our MPF provider sends us the cheque


  4. #14

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    Could you name the company, just so that people are warned about such a shitty employer?

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  5. #15

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    By law the company is entitled to do this. Our company does it different. The company pays the mandatory contribution of HK1,000 + a VC of a few thousand.
    When you leave or get sacked, you get 100% of the mandatory contribution of the company and depending on the service years, an x% of the VC paid by the company. This is called the vesting scheme I believe. The scheme starts at 50% and at 5 years service you'll be at 100%

    Even though the law allows it, it's a really shitty company you work for. The MPF is meant for when you retire, not as payment to let you go......


  6. #16

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    Quote Originally Posted by DaChief
    By law the company is entitled to do this. Our company does it different. The company pays the mandatory contribution of HK1,000 + a VC of a few thousand.
    When you leave or get sacked, you get 100% of the mandatory contribution of the company and depending on the service years, an x% of the VC paid by the company. This is called the vesting scheme I believe. The scheme starts at 50% and at 5 years service you'll be at 100%

    Even though the law allows it, it's a really shitty company you work for. The MPF is meant for when you retire, not as payment to let you go......
    Re your last statement (and this is in no way a knock at you), the government claim MPF is for your retirement, but if the government really meant it, they wouldn't allow such a crappy "loophole" in the system for employers to use.

  7. #17

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    Quote Originally Posted by neha
    Our MPF Provider is Manulife, The employee signs a form stating that all his/her dues have been settled and after 2-4 weeks our MPF provider sends us the cheque
    Are you referring to the Voluntary Contributions?

    Otherwise, it would be against the law for the employer to withhold both severance pay and the mandatory portion of MPF. Why would an employee sign such a statement if they didn't in fact receive any money due to him/her?

  8. #18

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    The way I interpret neha's post is that the the MPF provider only releases the funds when then have a signed statement from the employee that they have received their severance / long service payment in full.


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