A demerit scheme similar to the one adopted by the Housing Authority should be applied to restaurant owners who abuse the insolvency fund, an Executive Council member suggested yesterday. Cheng Yiu-tong said such a scheme was needed, along with stiffer penalties, to tackle unscrupulous employers who close restaurants to avoid paying wages. 'Records should be kept of those who avoid paying their workers by closing down their restaurants and those who abuse the insolvency fund. The data would then be used against the owners when they operate other restaurants in the future, so the owners could be kept under some control.' Under the demerit scheme adopted by the Housing Authority in May last year, companies are suspended from bidding for government contracts if they are found to have exploited their workers. Mr Cheng's comments follow a spate of restaurant closures that forced unpaid workers to seek help from the government's Protection of Wages on Insolvency Fund. A Labour Department spokeswoman said Mr Cheng's idea was new and that all suggestions would be up for discussion when Labour Advisory Board meetings resume in October. Mr Cheng, who is not a member of the advisory board, said his colleague in the Hong Kong Federation of Trade Unions, Ip Wai-ming, would put his suggestion forward. A higher maximum penalty for wage offences is expected to be a major topic at the board's next meeting. Any proposal from the board would have to pass through both the Legislative and Executive Council for discussion before it could come into effect. Labour officials are considering raising the maximum penalty from a fine of $200,000 and one year in prison to $350,000 and three years in jail.