Although the Government is concerned about local companies closing with wages in arrears, it has no intention of scaling the business registration certificates levy rates by trades.

Secretary for Economic Development & Labour Stephen Ip made this statement in his written reply to a question raised by Legislative Councillor Sin Chung-kai.

Mr Ip said the administrative costs would be fairly high if the levy collected differed from industry to industry. 

Implementing differential levy would be challenging

The secretary said charging a higher levy on the certificates for those trades which are often involved in arrears of wages may cause implementation problems because it is difficult to determine an appropriate level of levy for each of the selected industries.

An appeal mechanism would have to be established should there be arguments as to which industries should pay a higher levy and the rate of levy, he added.

"Although we have no intention of scaling the levy rates of the business registration certificates by trades at present, we will continue to review the proposal from time to time."

On possible abuse of the Protection of Wages on Insolvency Fund, Mr Ip said an inter-departmental Task Force has been set up in November 2002 to tackle the issue.

Enforcement actions taken against abusers

Since it was formed, the Labour Department has referred 25 cases of suspected abuses from the catering trade to the Task Force.

The Police arrested nine people in connection with two of the cases. Of the remaining 23 cases, 20 are still under investigation, while three were closed due to lack of evidence.

In May 2003, a team of experienced labour officers was set up in the department to conduct in-depth investigations into dubious applications.

Mr Ip said the department has also established a contact with the Food & Environmental Hygiene Department which is responsible for the issue of restaurant licences. The aim is to facilitate the exchange of intelligence on suspected cases of abuse of the fund.