The Employment Ordinance imposes criminal penalties on employers who fail to promptly pay wages and other monies that are due to their employees or former employees.
The Ordinance provides that an employer must pay wages within 7 days of the date they become due or within 7 days of the termination of employment.
An employer who willfully and without reasonable excuse fails to make such payments within this period commits a criminal offence, which upon conviction, can lead to a fine up to HK$350,000 and possible imprisonment for 3 years.
However, are these criminal penalties effective?
A review of the Hong Kong Government website reveals that there are frequent prosecutions made against employers and the fines imposed often run to six figures.
In many of these cases, the employer simply failed to pay wages within 7 days and the criminal prosecution was launched by the Labour Department.
It is not just the employer who can be held liable for failure to make timely payments, directors or other “responsible persons” can also be found personally liable. One recent case in the Eastern Magistrates’ Court for non-payment of wages to two employees resulted in two of the Company’s directors being fined HK$134,000.
The unpaid employee must be proactive in seeking to recover the monies they are owed via the Labour Department (or if the matter is contentious via the Labour Tribunal). The Labour Department will then notify the employer of the reported wrong doing and/or bring a criminal prosecution against the employer.
To assist them in their case, individuals, especially those who work irregular hours or receive commission only salaries, should keep proper records of their hours of work and the payments they have received.
OLN’s Employment team regularly advises clients on all aspects of employment law and provides strategic support to assist clients in achieving their aims in a speedy and cost effective manner.
This article is for information purposes only. Its contents do not constitute legal advice and readers should not regard this article as a substitute for detailed advice in individual instances.