Proposed resolution under the Protection of Wages on Insolvency Ordinance (section 16(3) of Cap. 380)

On March 19, 2025, LegCo approved a resolution under the Protection of Wages on Insolvency Ordinance (section 16(3) of Cap. 380) to amend the maximum severance payment under the Protection of Wages on Insolvency Fund ("PWIF"). This legislative action aims to enhance employee protection by raising the cap on ex gratia payments.

The subsidiary legislation is about increasing the maximum severance payment under the PWIF, which provides financial relief to employees of insolvent employers. The proposed resolution amends Section 16(2)(f)(i) of the ordinance to raise the maximum severance payment from HK$100,000 to HK$200,000. This change is intended to better support employee families during times of insolvency. The resolution is projected to increase annual payouts by approximately 92%, with additional payouts ranging from 92% to 954% under different economic scenarios. The financial position of the PWIF is considered robust, and the proposal is expected to enhance social stability without significant gender, productivity, or environmental implications.

The resolution has undergone consultation with the Labour Advisory Board and LegCo Panel on Manpower, ensuring comprehensive stakeholder input. Post-passage, there are plans for press releases and media availability to inform the public about the changes.