Understanding Hong Kong employment law: Employment Ordinance.

This is a guide to understanding Hong Kong’s employment law.

The Employment Ordinance is the legislation that sets out conditions in regard to employment in Hong Kong, and it is important that employers comply with the conditions specified in the ordinance.

Let’s find out the key topics about employment that employers should know.

What leave are employees entitled to?

Employees in Hong Kong companies are entitled to the following leave:

• Annual leave
• Sick leave
• Maternity leave
• Paternity leave
• Statutory holidays
• Rest days

Annual leave

Employees who have been employed under a continuous contract for at least 12 months are entitled to receive paid annual leave.

The number of paid leave depends on the employee’s years of service.

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Sick leave

Employees are entitled to two days of paid sick leave for each month completed during the first year of employment.

After a year, the employee will receive four days of paid sick leave and can be accumulated for a maximum of 120 days.

Medical certificates are required if the employee is absent for more than three days.

Maternity leave

Female employees under a continuous contract are given maternity leave for 14 weeks.

If the employee has been employed for more than 40 weeks, she will also be entitled to paid maternity leave at a rate of four-fifths of her average daily wage.

Paternity leave

Male employees are entitled to five days of paternity leave regarding the birth of their child. If the employee is has worked for more than 40 consecutive weeks, paternity leave will be paid at a rate of four-fifths of the employee’s average daily wages.

Statutory holidays

Hong Kong currently has 12 statutory holidays, and employees who have worked for at least three consecutive months are granted paid statutory holidays.

* The third day of Lunar New Year falls on a Sunday; therefore, the fourth day of Lunar New Year is a statutory holiday.

Rest day

A rest day is a continuous period of at least 24 hours, and employees under a continuous contract are entitled to one rest day every seven days.

Regular and overtime working hours in Hong Kong

There is no standard requirement regarding regular work hours or overtime work hours in Hong Kong. However, working hours can be agreed upon between the employer and employee.

Probation period

How long is the probation period?

The probation period in Hong Kong is usually one to three months.

If the employee is terminated within the first month of the probation period, the employer has the right to terminate the contract without prior notice, while employers must give at least seven days’ notice in advance after the first month of probation.

Termination of employment

Termination notice

Pursuant to section 6 of the Employment Ordinance, the length of notice required to terminate an employee’s contract is:

• In the case of a contract for one month renewable from month to month and which does not make provision for the length of notice required to terminate the contract, not less than one month.
• In the case of a contract for one month renewable from month to month and which makes provision for the length of notice required to terminate the contract, the agreed period, but not less than seven days.
• In every other case, the agreed period, but not less than seven days.

Severance payment

According to section 31B of the Employment Ordinance, severance pay (SP) is given to employees who have been employed under a continuous contract for at least 24 months if the employee:

• Is dismissed by the employer by reason of redundancy
• Is laid off

SP is calculated by the following:

• Monthly-paid employee – two-thirds of the last full month’s wage or two-thirds of HKD 22,500
• Daily-paid employee or piece-rate employee – 18 days’ wage based on any 18 days chosen by the employee out of the last 30 working days, or two-thirds of HKD 22,500, whichever is less

Long service payment

An employee who has been employed for at least five years is eligible for long service payment (LSP) if the employee:

• Is dismissed
• Terminates the contract and is under the age of 65 and has been employed for not less than five years

LSP is calculated by the following:

• Monthly-paid employee – two-thirds of the last full month’s wage or two-thirds of HKD 22,500 multiplied by the number of years of service
• Daily-paid employee or piece-rate employee – 18 days’ wage based on any 18 days chosen by the employee out of the last 30 working days, or two-thirds of HKD 22,500, whichever is less multiplied by the number of years of service

Employers can offset the LSP/SP payable to employees under the Employment Ordinance against the Mandatory Provident Fund (MPF) derived from the employer’s mandatory and voluntary contributions.

Employment and wage records

Employers are required to keep and maintain records regarding the wage and employment history of every employee for the preceding 12 months.

The wage record should be kept at the employer’s place of business or where the employee is employed for a period of six months after the employee ceases employment.

The record must include:

• The name and identity card number of the employee
• Date he/she commenced employment
• Job title
• Wages paid in each wage period
• Wage period
• Periods of annual leave, sick leave, maternity leave, paternity leave and holidays
• Amount of end of year payment
• Period of notice for contract termination
• Date of termination of employment

Hiring foreign employees

Employers in Hong Kong may only hire foreigners who have special skills, experience and knowledge that are not available in Hong Kong.

The foreign employee must have a valid work visa which the employer must apply for on behalf of the employee.

Conclusion

The conditions as specified above are some of the basic rights that employees are entitled to and requirements that employers must comply with. Feel free to contact Acclime if you need any advice related to human resources.