The Protection of Wages on Insolvency Ordinance was recently amended to increase the maximum amount of ex-gratia payment which could be paid to an employee under the Protection of Wages on Insolvency Fund (the “Insolvency Fund”) in respect of statutory severance payment owed by their employer in the event the employer has become insolvent.
This marks a significant step forward in bolstering the protection afforded to employees in Hong Kong in the event of their employers becoming insolvent.
This article provides a summary of the amendment.
The Protection of Wages on Insolvency Fund was established in 1985 with the primary objective of providing timely financial relief to employees who are owed payment for certain statutory entitlements in the event their employers have become insolvent.
Employees of employers that have become insolvent may apply to the Wage Security Division of the Labour Department for an ex-gratia payment from the Insolvency Fund in respect of outstanding wages, wages in lieu of notice, payment for untaken annual leave, payment for untaken statutory holidays and/or statutory severance payment owed by their employer. The maximum amount of ex-gratia payment which could be granted by the Insolvency Fund varies depending on the type of payment owed.
In 2022, the maximum amount of ex-gratia payment which could be paid to an employee under the Insolvency Fund in respect of outstanding...
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