Gov't launches subsidy scheme as MPF offsetting arrangement ends

It will help cover employers’ severance and long-service payment costs.

The government has introduced a 25-year subsidy scheme to share employers’ severance and long-service payment costs following the abolition of the Mandatory Provident Fund (MPF) offsetting arrangement.

The MPF offsetting arrangement allowed employers to use mandatory MPF contributions to offset payments for severance (SP) or long service (LSP).

Employers will still need to pay SP/LSP to employees under the Employment Ordinance before submitting subsidy applications.

Meanwhile, the statutory minimum wage rate has been raised from $40 per hour to $42.1 per hour.

Accordingly, the monthly monetary cap for employers to record total hours worked by employees rose from $16,300 to $17,200.

When wages payable to an employee in respect of a wage period are less than $17,200 per month, the employer must keep a record of the total number of hours worked by the employee in that wage period.