Hiring Expatriates, Student Apprenticeship and Volunteers

Hiring Expatriates, Student Apprenticeship and Volunteers

Expatriate

Mandatory Provident Fund (“MPF”):

The special focus of expatriate lies on the requirement in MPF.

Employers are required to enroll their staff in MPF if an employee is employed for at least 60 days subject to certain exceptions for casual employees employed in the catering or construction industry. Both the employer and employee are required to contribute to the fund at a rate of 5% of the employee’s relevant income, although a statutory cap applies.[1]

Conditional Exemption:

There are exemptions for expatriate employees who were given permission to remain in Hong Kong for employment purposes for less than 13 months or where the expatriate employee is a member of a provident, pension, retirement or superannuation scheme run in a jurisdiction outside Hong Kong.

Assuming an expatriate employee is not covered by any overseas retirement scheme, as the original period (nine months) and the extended period (six months) together exceed 13 months, he/she ceases to be exempt starting the first day after the end of the 13th month.  Employers therefore need to enroll expatriate employees in an MPF scheme within 60 days from the end of the 13th month.[2]

Student Apprenticeship[3]

According to the Minimum Wage Ordinance (Cap.608) (“MWO”), statutory minimum wage (“SMW”) does not apply to student interns as well as work experience students during a period of exempt student employment.  Details are as follows:

Student interns:

A student intern is:

  • a student undergoing a period of work arranged or endorsed by a local education institution specified in Schedule 1 to the Minimum Wage Ordinance, and the work is a compulsory or elective component of the requirements of a full-time accredited programme being provided by the institution to the student; or
  • a student resident in Hong Kong and undergoing a period of work arranged or endorsed by an institution, and the work is a compulsory or elective component of the requirements of a full-time education programme for a non-local academic qualification at degree or higher level being provided by the institution to the student.[4]

Work experience students during a period of exempt student employment

A work experience student is:

  • a student who is enrolled in a full-time accredited programme provided by a local education institution specified in Schedule 1 to the Minimum Wage Ordinance; or
  • a student who is resident in Hong Kong and enrolled in a full-time education programme for a non-local academic qualification at degree or higher level.[5]

and is under the age of 26 years at the beginning of employment.  The work experience student may agree with the employer to have a continuous period of up to 59 days(Note) as exempt student employment if:

  • the student has not commenced another exempt student employment period within the same calendar year(Not                        e) (whether under the employment of the same employer or not); and
  • the student has made a statutory declaration verifying the fact in (a) above and provided the declaration (or copy) to the employer.[6]

Note: This does not include any employment period before the commencement date of SMW (i.e. 1 May 2011).

Volunteer[7]  

A ‘true’ volunteer, as a non-employee, will fall outside the scope of the MWO. The MWO does not apply to non-employees, such as contractors and self- employed individuals. An employer may decide to engage a work experience student as a volunteer and not an employee, if that is appropriate in the circumstances.

Checklist-

You should know that:

  1. Expatriate employees Service suppliers can be exempted from Mandatory Provident Fund (“MPF’) scheme but such exemption is subject to certain conditions.
  2. Statutory minimum wage (“SMW”) does not apply to student interns as well as work experience students during a period of exempt student employment.
  3. A ‘true’ volunteer, as a non-employee, will fall outside the scope of the Minimum Wage Ordinance (“MWO”).

[1] Mandatory Provident Fund Schemes Ordinance (Cap 485); DLA Piper, From Hiring to Firing–A Basic Guide to the Hong Kong Employment Law Life Cycle.

[2] Mandatory Provident Fund Schemes Authority, MPF Employer, http://www.mpfa.org.hk/engm/information_centre/faq/employer/mpf_employer/index.jsp.

[3] Minimum Wage Ordinance (Cap 608); Labour Department of HKSAR, Labour Legislation, Frequent Asked Questions.

[4] Section 2 of the MWO.

[5] Ibid.

[6] Ibid., section 3.

[7] MWO; Linklaters, Minimum Wage Ordinance: More to it than Meets the Eye, April 2011.

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