Annie started working at Mr. Wong's boutique as a salesperson on March 1, 2002. Her monthly wages included basic wages and commission calculated according to the monthly sales figures. Mr. Wong also told her that her wage period would be a calendar month and that she would be paid on the seventh day of the following month.
On April 7, 2002, Mr. Wong paid Annie her basic wages for March but not her commission. He said it was company practice to pay the sales commission on the fifteenth day, because the company needed sufficient time to calculate the sales income and commission each month.
Could Mr. Wong pay Annie's commission 15 days after the end of the month?
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Under the Employment Ordinance "wages" means, with a few exceptions, all remuneration, earnings, allowances, tips and service charges, however designated or calculated, payable to an employee in respect of work done or work to be done. Allowances, including travel allowance, attendance allowance, commission and overtime pay are within the definition of wages. There are a few exceptions, however; wages do not include the value of accommodation, education, food, fuel, water, light or medical care provided by the employer.
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The law also requires an employer to pay wages to an employee as soon as practicable but in any case not later than seven days after the end of the wage period. Therefore, if the wage period of an employee is one month and expires on the last day of each month, the employer should pay the wages within seven days after the end of the month. In the present case, Mr. Wong is required to pay Annie both her basic wages and commission by April 7 latest.
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It is also important to note that
(a) An employer is required to pay interest on the outstanding amount of wages to the employee if he fails to pay the wages within seven days after the end of the month.
An employer who fails to pay interest on the outstanding amount of wages to the employee is liable to prosecution and, upon conviction, to a fine of $10,000.
(b) Moreover, if an employer who willfully and without a reasonable excuse fails to pay wages to an employee when it becomes due, then he/she is liable to prosecution and, upon conviction, to a fine of $200,000 and to imprisonment for one year.
The above case only serves as an illustration of the provisions of the Employment Ordinance on payment of wages. The Employment Ordinance remains, however, the sole authority for the provisions explained above and in case of dispute the final decision rests with the court.
|Q & A about the Employment Ordinance|
|Q1 ||Are commission, good attendance bonus and travel allowance counted as part of the wages? |
|A1 ||Yes. |
|Q2 ||Should the items referred to in Q1 be included in calculating end-of-year payment, maternity leave pay, severance payment, long service payment, sickness allowance, holiday pay, annual leave pay and wages in lieu of notice? |
|A2 ||Commission, good attendance bonus and travel allowance are included in the calculation of end-of-year payment, maternity leave pay, severance payment, long service payment, sickness allowance, holiday pay, annual leave pay and wages in lieu of notice. |
However, if the end-of-year payment is a lump sum already specified in the employment contract, the amount of such payment will be as specified in the employment contract. Otherwise, end-of-year payment will be a sum equivalent to a full month's wages, which should include commission, good attendance bonus and travel allowance.
|Q3 ||Can an employer deduct from his employee's wages for absence from work or damage to the employer's goods or equipment? |
|A3 ||Yes, but it is subject to restrictions. For absence from work, the employer can deduct a sum of wages, which is proportionate to the employee's absence from work. |
If an employee damages or causes loss to the employer's goods or equipment, the employer can, in any one case, deduct a sum equivalent to the value of the damage or loss but not exceeding HK$300. The total of such deductions shall not exceed one quarter of the wages payable to the employee in that wage period.
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Source : Labour Department