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Maximum amounts of ex gratia payment items from Protection of Wages on Insolvency Fund increased

The levels of ex gratia payments granted from the Protection of Wages on Insolvency Fund for employees who are owed wages, wages in lieu of notice, severance payment, pay for untaken annual leave and pay for untaken statutory holidays by their insolvent employers were increased.

With the passage of a resolution of the Legislative Council under the Protection of Wages on Insolvency Ordinance on 16 June 2022, the maximum amounts of a number of ex gratia payment items under the Fund were increased, including (a) arrears of wages from $36,000 to $80,000; (b) wages in lieu of notice from $22,500 to $45,000; (c) severance payment from $50,000 plus 50% of any excess entitlement to $100,000 plus 50% of any excess entitlement; and (d) pay for untaken annual leave and/or pay for untaken statutory holidays from $10,500 to $26,000.

The adjusted maximum amounts came into effect on 17 June 2022 upon gazettal of the resolution and apply in respect of wages, wages in lieu of notice, severance payment, pay for untaken annual leave and pay for untaken statutory holidays the liability of payment for which arose on or after this date.  This legislative amendment was an important step in enhancing employees’ protection.

The Fund was set up in 1985 to provide timely financial relief in the form of ex gratia payment to employees of insolvent employers.  

Please click here to view the resolution relating to the Protection of Wages on Insolvency Ordinance published in the Government Gazette.

More information on the Protection of Wages on Insolvency Fund

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