An employer has been fined $12,000 (US$1,550) at the Shatin Magistrates' Courts for failing to pay the full amount of sickness allowance to an employee on the normal pay day as required by the Employment Ordinance. The amount of sickness allowance involved was about $11,000.

Sickness allowance is a sum equivalent to four-fifths of the normal wages which the employee would have earned if he had worked on the sickness days. The ordinance defines wages as all remuneration, earnings, allowances and commission which is of a non-gratuitous and recurrent nature, tips and service charges, however designated or calculated, payable to an employee in respect of work done or work to be done. If overtime pay is of a constant character or its monthly average over the past 12 months is not less than 20% of the average monthly wages of the employee during the same period, the employer should include the overtime pay in calculating the sickness allowance.

An employee can accumulate paid sickness days after having been employed under a continuous contract. Paid sickness days are accumulated at the rate of two paid sickness days for each completed month of the employee's employment during the first 12 months of employment, and four paid sickness days for each completed month of employment thereafter. Paid sickness days can be accumulated up to a maximum of 120 days.

Sickness allowance must be paid to an employee if

• the employee has accumulated sufficient number of paid sickness days
• the sick leave is supported by an appropriate medical certificate, and
• the sick leave taken is not less than four consecutive days.

The maximum fine for failing to pay sickness allowance without reasonable excuse is $50,000.

...back to 3 November 2005

More information:
Employer fined for sickness allowance offences

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