With nearly HK$1 billion in the government's insolvency fund, the Labour Department will study a proposal to reduce the levy that contributes the most money into it.
Board members of the Protection of Wages on Insolvency Fund advised the department to cut the levy from HK$600 to HK$450 and proposed that an adjustment mechanism be established to accommodate different economic situations.
The major contributor to the fund, which helps settle workers' unpaid wages, is the Business Registration Certificate levy.
The levy was increased from HK$250 to HK$600 during the economic downturn in 2002, but the surplus snowballed to HK$966 million at the end of last month because applications to withdraw money from the fund were 19 per cent lower in the first eight months of this year compared with the same period last year (671 to 831), according to board figures.
The 671 applications this year covered 3,305 workers, compared with 5,231 workers from the 831 applications last year - a fall of 37 per cent.
Legislator Lee Cheuk-yan, of the Confederation of Trade Unions, said that the improving economy accounted for the fall in fund applications.
But he said the government should first review the coverage of the fund before studying the levy cut.