Subcontracting vs Employment

Closed Thread
Page 1 of 3 1 2 3 LastLast
  1. #1

    Join Date
    May 2008
    Location
    DB
    Posts
    3,699

    Subcontracting vs Employment

    My husband registered with an agent in Hong Kong to find teaching assignments. He was given a five-month assignment attached to a local secondary school as a NET and issued with a contract describing it as a subcontracting relationship.

    I have just learned that as such, he is not eligible for MPF or workers' compensation, but he IS liable for income tax (can't even call it salary tax).

    Is this koscher?


  2. #2

    Join Date
    Jan 2008
    Posts
    1,966

    As a subcontractor he may have to register a sole proprietor business and get a B.R. Certificate. He has also to pay MPF as self employed.
    I may be wrong.


  3. #3

    Join Date
    May 2008
    Location
    DB
    Posts
    3,699

    Thank you Oldtimer.....not something he was advised about upon taking up this assignment. He doesn't operate a business nor wish to, he merely registered with this one company who then sent him out on assignments and we've always thought that meant he was employed by them as they have been paying him his 'salary'.


  4. #4

    Join Date
    Oct 2005
    Posts
    14,414

    Who is paying his salary?

    The Agent or the client?

    If its the agent then he should be treated as a 'Temp' like you would in the U.S and Europe.


  5. #5

    Join Date
    May 2008
    Location
    DB
    Posts
    3,699

    Hi Jimbo.

    He's being paid by the agent, i.e. the business he registered with and not the school. Interestingly enough, he submits his timesheets at the end of the month to the agent (to substantiate payment of the full month fee) and it takes them a further month to actually pay him, so in effect he's not being paid within the legal timeframe of 7 working days after the end of the wage period but then they'd probably tell him that he's not 'employed' so that doesn't apply!!

    I suppose this is how they work around not being a recruitment agency per se, as we don't even know what they charge the school for his services, only what the agency pays him.

    Thanks


  6. #6

    Join Date
    Oct 2005
    Posts
    14,414

    Usually what would happen is the Agent would charge the school what they're paying your husband and an extra 40-50% or so on for them.

    As and when the school pays the agency thats when they take their cut and give him the rest.


  7. #7

    Join Date
    May 2008
    Location
    DB
    Posts
    3,699

    Thank you Jimbo!!

    cough cough....they charge 40-50% on top of his earnings, that explains why they are so low!!! That's f***ing ridiculous!!!! And the school apprently pays on presentation of their invoice which they produce when they receive the timesheet.

    Dear lord this is daylight robbery!!!


  8. #8

    Join Date
    Mar 2009
    Location
    Hong Kong
    Posts
    2,260

    if the school like him, they may wish to hire him full time as their NET.

    however, most schools cannot afford to hire more staff on a full time basis and especially not on a NET salary with all the housing allowances and perks...

    why didnt he apply through the NET scheme?


  9. #9

    Join Date
    Oct 2005
    Posts
    14,414

    Sadly this is the way it is in the contracting industry. It might not be as high though as the 40-50% I've quoted due to the currrent economic climate but it certainly was a few years back.

    Shouldn't be too hard for him to find the invoice and find out exactly what they're charging the school.


  10. #10

    Join Date
    May 2008
    Location
    DB
    Posts
    3,699

    Hi UK/HK boy - they would LOVE to keep him on but the agreement with the agency is 'no touch' for 12 months after the assigment on his side and most probably theirs too. They now have to look for someone new. As he was already in HKG and has a dependent visa attached to a Permanent HKG resident (myself) he wouldn't qualify for the accommodation add on but that's no biggie for us.

    He went through an agency as he was new to HKG and thought that was the fastest way as he was entering the market in December not at the beginning of the school year. He's now registered with the NET scheme through the education board and is going for interviews.

    Thanks Jimbo, yes I forget that recruitment agencies charge 30% of annual earnings for an 'introduction' too He hasn't ever seen the school's invoice, he was given a contract with his salary and that's all he's seen - I've asked him to subtly try and find out from the school

    Thanks for the input guys


Closed Thread
Page 1 of 3 1 2 3 LastLast