The HKSAR Chief Executive announced her first policy address yesterday. Human Resources practitioner should be aware of the upcoming development in three areas: (1) Mandatory Provident Fund (MPF) off-set with mandatory severance payment and long service payment under the law (2) potential enhancement of paternity leave and (3) a study of enhancing maternity benefits for female employees.
(1) MPF "offsetting" arrangement has been discussed for a few years. The last-term government provided a proposal that both business and labour representatives did not come to a consensus. Mrs Lam, current Chief Executive, confirmed the current-term government stance to abolish the "offsetting" arrangement. The focus of future discussion is how to assist employers in saving up a dedicated reserve in advance to cover any potential expenses arising in the future after abolishing the “offsetting” arrangement.
(2) Potential enhancement of paternity leave
Statutory paternity leave was first implemented in February 2015. It is now proposed to increase from 3 days to 5 days.
(3) Maternity leave enhancement feasibility study
There is no immediate proposal for enhancing statutory maternity leave benefits for female employees in the policy address. The Government will commence a study on the subject. The current statutory maternity leave duration is 10 weeks at 4/5 pay subject to female employees satisfying certain requirements.
Our view:
It is a positive move for the HK Government to consider enhancing maternity and paternity leave benefits to support the family needs. We see some global and local companies like Microsoft, Schneider Electric, Unilever, Hang Seng Bank announcing enhancement of various leave benefits (not necessarily on or confined to maternity and paternity leave) recently. HR practitioners should proactively plan a review of the leave benefits on a holistic basis. When doing so, any proposed changes should take into account these factors: whether the proposed changes will be aligned with the company's culture and values, the demographic of employees in terms of gender, age groups and stage of life etc., the types of leave most needed and/or valued by employees, the potential cost of introducing new and/or enhancing leave benefits and timing of implementation.
Norris is an independent Total Rewards Consultant who helps Corporate or HR Executives address people challenges with pragmatic total rewards solutions. Contact Norris for a discussion and find out how she can help your organisation at norriswong@inspireyouconsulting.com