Hong Kong bosses may be forced to set aside savings to make long service and severance payments
Chief Secretary Matthew Cheung floats idea as way to break impasse over scrapping of controversial pension fund offset mechanism
Hong Kong employers may be forced to set aside a sum of money in the form of “savings” to pay long service and severance payments under a proposal the government is considering for the time when bosses can no longer dip into staff pension funds to cover the two payments.
Chief Secretary Matthew Cheung Kin-chung floated the idea on Thursday as he made it clear that the controversial Mandatory Provident Fund offset mechanism – which has for years strained relations between workers and bosses – must be scrapped.
To ensure that employers will be financially capable of making the two payments, Cheung said the government was considering legislation stating that businesses must set aside a sum of money as “savings”.
“It’s like we are forcing the employers to save money. It’s like before you leave home for work, your wife asks you to set aside HK$100 as savings,” Cheung told a media lunch. “The money still belongs to employers.”
Cheung did not offer further details of the idea, including the size of the “savings” and how often employers would have to set aside money.