On 9 June 2022, the Hong Kong Legislative Council passed the Employment and Retirement Schemes Legislation (Offsetting Arrangement) (Amendment) Bill 2022 (“Bill”).

The long-awaited abolition of employers’ statutory right to offset long service payment (“LSP”) or severance payment (“SP”) payable to employees against the employers’ contributions to mandatory provident fund (“MPF”) scheme will take effect from 2025.

This article highlights the main provisions in the Bill and their effects that are worth noting for both employers and employees.