Following is a question by the Hon James To and a written reply by the Secretary for Development, Mr Paul Chan, in the Legislative Council today (February 17):
According to the Guidelines on Wage Payment Monitoring and Reimbursement of Contractor's and Sub-contractors' Contributions to the Mandatory Provident Fund for their Site Personnel (the Guidelines) issued by the Development Bureau in July 2012, the authorities will reimburse the contractors of public works projects for the contributions to the Mandatory Provident Fund (MPF) schemes made by them and their sub-contractors for their site personnel. Moreover, under the current requirements, a Labour Relations Officer (LRO) must be employed for each site to undertake the duties of overseeing the attendance of workers, payment of wages, etc. Some members of the public have complained to me that some contractors requested LROs to fabricate workers' attendance records in order to obtain money fraudulently by claiming reimbursement of MPF contributions from the authorities. In this connection, will the Government inform this Council:
(1) of the respective numbers of claims received and approved by the authorities for reimbursement of MPF contributions each year since the implementation of the Guidelines, and set out, by the name of contractor, the name of project, the number of site personnel and the total amount of contributions involved in each of such claims; the general reasons for some of the claims being rejected;
(2) given that under the current requirements, contractors must (i) install card reading devices at construction sites for checking and verifying the data (including those on attendance) stored in the construction workers registration cards, or (ii) upon obtaining from the Construction Industry Council an exemption from installing the said devices, complete the workers' attendance reports by hand or by other means, whether the authorities have, since the implementation of the Guidelines, received any complaint about false information in attendance reports and contractors requesting LROs to tender false attendance records; if they have, of the respective annual numbers of such complaints, and the measures adopted by the authorities for ensuring the truthfulness of the attendance records; whether the authorities have regularly looked into the work of LROs to ensure that they are not unduly influenced by contractors; if they have, of the details; if not, the reasons for that;
(3) given that the Guidelines allow contractors to make wage payments by cheques to casual workers at construction sites who have worked for not more than seven working days, whether the authorities have grasped the situation of contractors making wage payments by cheques, and whether such a practice has shown a rising trend; whether there were contractors who obtained reimbursement of MPF contributions in the past three years without providing any supporting document and declaration in relation to wage payments; if there were, of the details;
(4) whether the authorities have assessed if the following situation exists: contractors making wage payments to site personnel by cash in order to evade making MPF contributions for them; if they have assessed and the outcome is in the affirmative, of the measures adopted by the authorities for curbing the situation in order to safeguard the rights of site personnel; and
(5) given that the summary of contributions issued by MPF trustees or other supporting documents specified in the Guidelines may be used as proof that the contractors have actually made MPF contributions for the site personnel employed by them, of the number of cases, in each year since the implementation of the Guidelines, in which contractors provided supporting documents other than the summary of contributions when they made claims for reimbursement of MPF contributions and, among them, the number of cases the claims in which were approved; whether the authorities will require that only the summary of contributions will be accepted as proof of contributions in order to eradicate the act of contractors obtaining money fraudulently by claiming reimbursement of MPF contributions; if they will, of the details; if not, the reasons for that?
To enhance the protection for the wages and Mandatory Provident Fund (MPF) contributions for construction workers, the Government has introduced a series of measures in public works contracts to protect and control wage payment to site personnel. They include requiring that site personnel must enter into written employment contracts with their employers; that wage payment must be made through bank autopay; installation of a computerised smart card system at construction sites to keep records of site personnel entering and leaving works sites; and employment of Labour Relations Officers (LROs). The objectives are to monitor the wage payment records and MPF contributions of contractors and to assist the Labour Department in dealing with complaints about wage arrears. To encourage contractors/sub-contractors to make MPF contributions, the Government has stipulated a contractual provision for reimbursing contractors of public works projects for their MPF contributions for site personnel, including the MPF contributions payable by their sub-contractors. On their part, contractors are required to submit attendance records of site personnel to resident engineers on a daily basis. They are also required to submit records of wage payments and MPF contributions regularly to assist LROs in monitoring wage payments to workers.
My reply to the Hon James To's question is as follows:
(1) A breakdown by the works departments of the reimbursements of MPF contributions for site personnel to contractors and their sub-contractors for the past three years is set out in the Annex. Regarding the number of claims received and approved by the authorities for reimbursement of MPF contributions, the names of the contractors and projects concerned and the number of site personnel involved, the compilation of such data requires a lot of resources and the resulting statistics may not be suitable for reference purpose. As such, the Government has not maintained such statistics at present. Generally, rejected claims are usually made on the grounds that the contractors concerned fail to provide the necessary documents as specified in the Guidelines.
(2) According to the available records, a relevant works department received one complaint about false information in attendance records over the past three years. But no follow-up action was taken as the complainant could not provide information about the works site or the works project involved. We have not received any complaint about contractors asking LROs to fabricate attendance records. To ensure the accuracy of attendance records, resident engineers and contractors have jointly put in place an inspection system. Under the system, LROs would conduct random surveys of site personnel during their regular site inspections to check against the attendance records submitted by contractors. In addition, resident site personnel would also record the number of workers of different trades working on site in site logbooks on a daily basis. Discrepancies between the numbers recorded in site logbooks and attendance records would be investigated and followed up.
(3) As for the number of contractors making wage payments by cheques each year and the recent trend of this practice, the Government has not maintained any record in this respect. Generally, claims for reimbursement of MPF contributions would not be entertained if the contractors concerned fail to provide the necessary supporting documents as specified in the Guidelines.
(4) The current measures related to wage payment include requiring that wage payment for site personnel must be made through bank autopay. For site personnel who do not have a bank account, contractors or sub-contractors must pay their wages by cash cheques. Casual workers must also be paid with cash cheques and with detailed payment records kept to avoid disputes. These payment measures are instituted to discourage the practice of paying wages to site personnel in cash. Indeed, most contractors/sub-contractors do not pay wages in cash. In case contractors/sub-contractors need to pay wages in cash under certain circumstances, they must provide receipts of wage payments duly signed and acknowledged by their workers. To ensure compliance with the requirements of the works departments for monitoring wage payments and reimbursement of MPF contributions, the receipts must show the number of days the workers have worked at the site and must be verified by LROs by checking against the computerised attendance records. Though most contractors/sub-contractors would not pay the wages of site personnel in cash, we cannot preclude the possibility that some contractors/sub-contractors would resort to paying wages in cash to evade their obligations for making MPF contributions. On receipt of such a complaint, we may conduct investigations by making reference to the relevant computerised attendance records and records for wage payments and MPF contributions to protect the interests of site personnel.
(5) According to the works departments' records, contractors are able to furnish contribution summaries for most of their reimbursement claims for MPF contributions. The cases where MPF trustees cannot provide timely contribution summaries constituted only a minority. In these cases, the contractors concerned should provide other supporting documents as substitutes. But we have not maintained any statistics on these cases. Though the Guidelines allows contractors to provide other supporting documents in lieu of contribution summaries in their reimbursement claims for MPF contributions, it also stipulates that the documents must provide proof of the actual amount of MPF contributions made by the contractors/sub-contractors on behalf of their site personnel. As there is an existing mechanism for preventing contractors from obtaining reimbursements of MPF contributions by fraudulent means, the Government has no plan to restrict that only MPF contribution summaries will be accepted as proof of contributions.
Ends/Wednesday, February 17, 2016
Issued at HKT 12:40