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Overview of Hong Kong Labor Laws

Hong Kong's labor law provides a comprehensive framework governing the rights and responsibilities of employers and employees in the Special Administrative Region.

Key Components

The critical component is the Employment Ordinance, which outlines fundamental employment terms, including working hours, rest days, holidays, and termination procedures. It also addresses important issues such as wages, benefits, and maternity leave to ensure employee protection.

The labor laws also recognize collective labor rights, allowing employees to form or join trade unions and engage in collective bargaining. This ensures that workers have a say in employment terms, wages, and working conditions, ultimately promoting a fair and conducive working environment.

These include:

  • Health Ordinance: Prioritizes workplace safety and health, emphasizing creating a hazard-free environment.

  • Employees' Compensation Ordinance: Requires employers to compensate workers for work-related injuries or illnesses.

  • Occupational Safety and Health Regulations: Mandate preventive measures.

Employment Ordinance

The Employment Ordinance is the main piece of legislation governing conditions of employment in Hong Kong. It covers a comprehensive range of employment protection and benefits for employees, including:

  • Wage protection

  • Rest days

  • Statutory holidays

  • Paid annual leave

  • Sickness allowance

  • Maternity protection

  • Statutory paternity leave

  • Severance payment

  • Long service payment

  • Employment protection

  • Termination of employment contract

  • Protection against anti-union discrimination

All employees covered by the Employment Ordinance, regardless of their work hours, are entitled to fundamental safeguards outlined in the Ordinance. Employees under continuous contracts are entitled to additional privileges, such as rest days, paid annual leave, sickness allowance, severance payment, and long service payment, if certain conditions are met for each item.

Exemptions

The Employment Ordinance does not apply to:

  • Any family member residing with the employer.

  • Employees as defined by the Contracts for Employment Outside Hong Kong Ordinance.

  • Individuals serving under crew agreements as per the Merchant Shipping (Seafarers) Ordinance or on ships not registered in Hong Kong.

  • Apprentices with registered apprenticeship contracts under the Apprenticeship Ordinance, excluding specific provisions of the Employment Ordinance.

Employment Contracts

Employment contracts must align with the regulations outlined in the Employment Ordinance. Any contract clause that seeks to undermine the rights, benefits, or protections granted to employees by the Ordinance will not hold legal.

Hong Kong's employment landscape offers two main types of contracts—non-continuous and continuous employment contracts. The latter provides enhanced statutory benefits, while the former serves as a basic employment agreement.

Non-Continuous Employment

Continuous Employment

Provide essential protection under the Ordinance, including wage payments, wage deduction restrictions, statutory leave, and more.

Provides all statutory benefits under the Employment Ordinance – rest days, paid annual leave, sickness allowance, severance payments, and the like.

Implied to be valid for one month and renewable monthly until deemed a continuous contract.

Typically established when employed by the same employer for four weeks or longer, with at least 18 hours each week.

Can be part-time or full-time.

Can be part-time or full-time.

An employment contract is a formal agreement between an employer and an employee outlining the terms and conditions under which the employee will work. This contract can be verbal or written, encompassing explicitly stated and implicitly understood terms. These terms include the following key aspects and must be communicated before the commencement of employment:

  • Wages: This includes the wage rate, overtime compensation rate, and additional allowances.

  • Wage Period: The designated timeframe for disbursing wages.

  • Wage Components: Such as commissions and allowances, wage rates, payment conditions, and related contracts.

  • Benefits: Holiday pay, annual leave compensation, sickness allowance, maternity leave remuneration, and paternity leave stipends.

  • Notice Period: The length of notice required to terminate the employment contract.

  • End-of-Year Payment: If an employee is entitled to an end-of-year payment, the contract must outline the specific details, its proportional amount, and the period the employer will pay it.

If the employment contract is in writing, the employer must provide the employee with a copy of the written agreement. For unwritten contracts, employers must provide this information in writing upon the employee's written request before employment starts.

Maintenance of Wage and Employment Records

Employers must maintain accurate records containing each employee's wage and employment history for the preceding 12 months.

Required Employment Records

Full name and identity card number

Date of commencing employment

Job title

Compensation for each wage cycle

Duration of the wage cycle

Total hours worked during each wage cycle (if applicable)

Instances of annual leave, sick leave, maternity leave, paternity leave, and holidays entitled to and taken, along with precise payment details

Year-end payment sum and corresponding period (if applicable)

Notice period required for contract termination

Date of employment termination (if applicable)

Note: These employment records should be kept at the employer's business premises or the employee's workplace and retained for six months after the employee leaves.

Legal Consequences for Non-Compliance

Failure to maintain the mentioned records can lead to prosecution by employers, resulting in a fine of HK$10,000 (US$1,279) upon conviction. The Labor Department has the authority to inspect these records, question individuals, and seize items that could serve as evidence of a violation of the Employment Ordinance. Non-compliance can lead to prosecution and, if convicted, a fine of HK$100,000 (US$12,794) and a one-year prison sentence.

Working Hours

Hong Kong does not have statutory limits on working hours for adults or regulations on overtime compensation. However, there are limitations for minors:

Age Range

Employment Conditions

Under 15

Prohibited from working

15-18 (industrial undertakings)

Max 8 hours/day (7 am - 7 pm) Max 48 hours/week Max 6 days/week 5 hours of continuous work followed by at least half an hour break

13-14 (non-industrial establishments)

Permitted to work if attending full-time schooling and completed Form III of secondary education

Under 13

Prohibited from employment unless special permission is granted

Compensation Structure

Employers in Hong Kong are required to pay compensation to employees or their families in the event of injury, illness, or death arising from and during employment. This applies to all workers under a service contract or apprenticeship, including those employed in Hong Kong by local employers who suffer an injury while working outside of Hong Kong.

Minimum Wage Ordinance

The Minimum Wage Ordinance establishes a Statutory Minimum Wage (SMW) regime to protect grassroots employees. In 2023, the minimum hourly wage rate increased from HK$37.5 (US$4.8) to HK$40 (US$5.11).

Employers must record the total hours worked by an employee if:

  • The employee is paid the minimum wage.

  • The wages payable to the employee for the period are less than the monetary cap specified in the Ninth Schedule to the Employment Ordinance (or a proportionate amount if the wage period is less than a month).

The monetary cap for keeping records of hours worked is HK$16,300 (US$2,085) per month.

Social Insurance – Mandatory Provident Fund (MPF)

Social security is a vital part of employment in Hong Kong. Employers' specific MPF responsibilities include enrolling eligible employees, contributing funds, and keeping accurate records. The mandatory contribution rate is five percent of the employee's relevant income, subject to minimum and maximum relevant income levels.

Monthly Relevant Income

Employer Contribution

Employee Contribution

Less than HK$7,100

Relevant income x 5%

No contributions required

HK$7,100 to HK$30,000

Relevant income x 5%

Relevant income x 5%

More than HK$30,000

HK$1,500 (US$191.91)

HK$1,500 (US$191.91)

Employee’s portion of mandatory MPF is deductible for calculating Hong Kong salaries tax, subject to a capped amount of HK$18,000 (US$2,300).

Employees' Compensation Ordinance

The Employees' Compensation Ordinance establishes a no-fault, non-contributory employee compensation system for work injuries. Employers are liable to pay compensation for injuries sustained by their employees due to an accident arising out of and during employment or in respect of occupational diseases specified in the Ordinance.

Compensation for a Fatality

Amount

Under 40

84 months' earnings or minimum compensation amount, whichever is higher

40 to 56

60 months' earnings or minimum compensation amount, whichever is higher

56 or above

36 months' earnings or minimum compensation amount, whichever is higher

Minimum Compensation Amount

HK$486,300 (US$62,112)

Monthly Earnings Cap

HK$36,550 (US$4,668)

Funeral and Medical Expenses Cap

HK$94,690 (US$12,094)

Compensation for Permanent Incapacity

Amount

Under 40

96 months' earnings or minimum compensation amount, whichever is higher

40 to 56

72 months' earnings or minimum compensation amount, whichever is higher

56 or above

48 months' earnings or minimum compensation amount, whichever is higher

Maximum Compensation Amount

HK$552,190 (US$70,527)

Monthly Earnings Cap

HK$36,550 (US$4,668)

In the event of permanent partial incapacity, the compensation amount will be a percentage of the amount given for total incapacity, proportional to the loss of earning capacity caused by the injury.

Occupational Safety and Health Ordinance

The Occupational Safety and Health Ordinance provides safety and health protection to employees in industrial and non-industrial workplaces. It covers almost all workplaces, including factories, construction sites, catering establishments, offices, laboratories, shopping arcades, and educational institutions. Exceptions include:

  • An aircraft or vessel in a public place.

  • The place occupied by the driver of a land transport vehicle in a public place (but other employees working in the vehicle are covered).

  • Domestic premises where only domestic servants are employed.

  • Places where only self-employed persons work.

Hiring Foreign Employees

To work legally in Hong Kong, foreign nationals must hold a valid employment visa. The foreign workforce can be categorized into two main groups:

Visa Type

Description

Employment Visa

Foreign professional staff or graduates with special skills

Supplementary Labor Scheme Visa

Semi-skilled professionals or specialized experts, such as technicians

Eligibility Criteria for Work Visa:

  • Must be 18 years or older, with some exceptions.

  • Clean criminal record.

  • Solid educational background, typically a university degree.

  • Genuine job opening.

  • Confirmed employment offer.

  • Compensation package in line with market rates.

The Immigration Department evaluates work visa applications based on the applicant's exceptional experience and qualifications for the position and the sponsoring company's inability to fill the job locally.

Employment Termination and Severance Payment/Long Service Payment

Terminating employment in Hong Kong hinges on two primary approaches:

  • Notice-based termination: A seven-day notice is obligatory during the probation period, whereas post-probation, one month's notice is required. Payment in place of notice is calculated based on the employee's earnings over the preceding year. Continuous contracts exhibit varying notice or payment prerequisites, while non-continuous contracts follow the agreed period.

  • Immediate termination: Employers can terminate an employment contract without notice in case of willful disobedience of a lawful and reasonable order, misconduct, fraud, dishonesty, or habitual neglect of duties. Conversely, employees can terminate contracts without notice for various reasons.

Severance Pay

Termination payments are contingent upon factors like tenure and contractual terms, encompassing wages, notice pay, unused leave, end-of-year payments, severance, long service payments, and additional benefits.

  • Severance payments: Extended to employees with more than 24 months of continuous service, primarily in cases of redundancy or layoffs, with a maximum cap of HK$390,000 (US$49,900).

  • Long service payments: Apply to employees with over five years of uninterrupted service, covering various termination scenarios, also capped at HK$390,000 (US$49,900).

Retirement Age

Hong Kong has no statutory retirement age. Companies are permitted to create their own retirement policies, usually setting the age between 60 and 65. The retirement age for civil servants is 65.



This comprehensive guide aims to help employers and employees navigate Hong Kong's labor laws effectively. For specific details and updates, always refer to the latest guidelines from the Hong Kong Labour Department.



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