What is an Industry Scheme? Enhancing Employer Convenience and Reducing Burden

What is an Industry Scheme?
Enhancing Employer Convenience and Reducing Burden

Industry Scheme

When restaurant owners or human resources managers of interior design companies need to hire short-term workers to assist during peak seasons, they might have a question: Can I avoid registering them for the Mandatory Provident Fund (MPF) if their employment period doesn’t exceed 60 days?

The answer is no. According to the regulations of the Mandatory Provident Fund Schemes Authority (MPFA), employers in the catering and construction industries are required to enroll their employees in the Mandatory Provident Fund Scheme within the first 10 days of employment, regardless of the duration of employment. Due to the high turnover rates and frequent short-term employment with daily wage rates prevalent in these two industries, the MPF system has introduced industry schemes specifically, making it easier for employers and employees to manage their MPF arrangements.

What is an Industry Scheme?

The industry scheme is a Mandatory Provident Fund (MPF) plan designed for temporary employees in the construction and catering industries. It aims to ensure that these short-term workers, even if employed for just a day, are required by their employers to participate in the Mandatory Provident Fund Scheme and make contributions.

Employers in the catering and construction sectors must register both "casual employees" and "regular employees" for the Mandatory Provident Fund Scheme and make contributions for them. Casual employees refer to those engaged in the catering or construction industries, hired by the day or for a period of fewer than 60 days by their employer.

How to Join the Industry Scheme?

Currently, there are two appointed trustee companies in Hong Kong managing the "industry scheme," namely Union Trustee Company Limited and Bank of East Asia (Trustees) Limited.

Temporary employees can open a temporary employee account in advance with these two trustee companies. Both industry scheme trustees will issue a "casual worker card." If you are already participating in the scheme and your newly hired temporary employees possess the same scheme's "casual worker card," you don't need to arrange for their enrollment. Simply have the temporary employees present their "casual worker card" for contributions.

If temporary employees have not opened an account in the industry scheme you participate in, as mentioned earlier, arrangements for their participation must be made within the first 10 days of their employment.

What Are the Advantages of the Industry Scheme for Employers?

1.Reducing Administrative Burden for Employers: Employers participating in the industry scheme, who choose to contribute for temporary employees on the next working day after payday, are exempt from providing contribution records to the employees and are relieved of the obligation to retain contribution records, reducing administrative work.

2.Simplified Management Processes: The industry scheme offers employers a more straightforward Mandatory Provident Fund arrangement, reducing complex management procedures. Employers no longer need to arrange for Mandatory Provident Fund contributions for each temporary employee individually; they only need to ensure participation in the industry scheme and provide accurate information.

3.Enhancing Employee Satisfaction: Offering the industry scheme to employees may increase their satisfaction with the company. These schemes contribute to employee benefits, help increase employee loyalty, and improve the overall work environment.

Scope of the Industry Scheme: Coverage in the Construction and Catering Industries

The industry scheme covers the construction and catering industries. The construction industry encompasses various categories such as foundation engineering, construction engineering, demolition work, among others. The catering industry includes entities with food licenses, cafeterias in schools or workplaces, and various food-related establishments such as food manufacturing plants, eateries, factory canteens, etc.

The catering and construction industries experience high staff mobility and complex payroll calculations. If in need of accounting services such as payroll audits and accounting consultations, feel free to contact us, City AI Accounting, as we provide professional accounting services.

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