12. Are employers obliged to take out compensation insurance policies for all employees?
Regardless of whether the employees are working full-time or part-time (including part-time domestic helpers and summer job workers, etc.), employers are required, under section 40 of the ECO, to have valid insurance policies taken out to cover employers' liabilities under the Ordinance and at common law for injuries at work in respect of every employee.
Offences and Penalties
Employers who fail to have valid insurance cover are liable to prosecution and, on conviction, a maximum fine of $100,000 and imprisonment for two years.
Employers must also not make any deduction from the earnings of employees to defray the costs of insuring against their liabilities to pay compensation. Otherwise, they are liable to a fine of $10,000 and imprisonment for 6 months.
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