Legislators representing different sectors are split over a proposed change to the MPF offsetting mechanism.

Under the bill, which is being debate in Legco on Wednesday, employers will no longer be able to use their mandatory contributions to workers' MPF accounts to make redundancy and long-service payments.

Federation of Trade Unions lawmaker Dennis Leung supports the bill. He joined his party mates in handing in a petition in support of the legislation to Legco, noting that the idea of cancelling the offsetting mechanism was first floated around a decade ago.

Leung said the bill would better protect workers, noting that around HK$60 billion from their funds has been offset for their redundancy and long-service payments since the establishment of the MPF system over two decades ago.

He said the financial burden for bosses would not be huge, because the administration is planning to roll out a 25-year subsidy scheme to help them meet the extra costs.

"The government has pledged to provide a subsidy of HK$33.2 billion for the business sector. So, over a 25-year period, bosses only need to fork out a maximum of HK$3,000 [to make the payments] per employee in the first three years... The rest will be subsidised by the government," he said.

"So the business sector need not worry that their operating costs will surge in the next 25 years."

But Liberal Party chairman Peter Shiu said his party's lawmakers would likely vote against the bill, saying policies that incur extra costs for employers could cause some businesses to fold, as the economy struggles under the pandemic.

He said the worker-employer relationship could also be affected if the offsetting mechanism is cancelled, saying unscrupulous bosses might dismiss workers to avoid long-service payments, while some employees might try to get fired on purpose for the payments.