What Are Legal Consequences if an Employer Fails to Pay Wages On Time?
Under section 23 of the Employment Ordinance (Cap. 57), an employer should pay wages to an employee when they become due and in any case within 7 days from the end of the wage period.
Offences & Penalties
An employer who wilfully fails to pay wages on time without reasonable excuse is liable to prosecution. It is a criminal offence.
The maximum sentence is a fine of HK$350,000 and an imprisonment term of 3 years.
Employer who fails to pay wages on time is also required under the law to pay interest on the outstanding wages to the employee.
An employer who wilfully and without reasonable excuse fails to pay interest on the outstanding wages to the employee is liable to prosecution. Upon conviction, the maximum penalty is a fine of HK$10,000.
Termination of Employment Contract
The employment contract is regarded as being terminated by the employer without notice if wages are not paid within one month from the due date of payment. The employer would then be required to pay wages in lieu of notice in addition to other statutory and contractual benefits to the employee.
An employer who is no longer able to pay wages due should terminate the employment contract in accordance with its terms and conditions.
For legal services and advice on employment contract and employment compensation claims, please contact CHOW & CHEUNG, Hong Kong Solicitors & Notary Public [E-mail: firstname.lastname@example.org / Tel: +852 2856 3078]