Recruitment in Hong Kong is not a complicated process but there are some local norms, rules, and best practices that employers should be aware of. This article will outline the overview of recruitment in Hong Kong, e.g.
Employers must understand these local values, policies, and best practices to avoid legal or cultural pitfalls. Below are the key elements to take note of when hiring in Hong Kong.
Content Outline
Negotiation Culture in Hong Kong
In the context of Hong Kong, the process of hiring is frequently perceived as a negotiation between the employer and the candidate. Employer seeks to secure the most qualified candidate for the position at the most economical cost while the candidate seeks to negotiate the highest possible salary and benefits package.
This negotiation process can be protracted and intricate since both parties are striving to achieve the most advantageous arrangement. The goal of the negotiation is to reach a mutually beneficial agreement which requires both parties to be willing to meet at the middle line in order to achieve a mutually satisfactory arrangement.
Address Protocol in the Workplace
Addressing coworkers and people you meet respectfully is essential in any workplace. Using proper and polite forms to address them shows that you value their position and contributions, this is essentially helping in building positive relationships and good first impressions.
It’s always best to ask how they want to be treated first. This is especially important if you are not sure about their culture. For example, in some cultures, it is considered rude to call someone by their first name unless you are friends.
Here are some common examples of address protocols in Hong Kong.
- When first meeting a candidate, it’s better to ask them how they would like to be called.
- When writing to a candidate, address them by their title and surname.
- When speaking to a candidate, address them by their title and surname, unless you are specifically asked to use their first name.
When you mention a candidate in a meeting or discussion, address them by their title and name.
Employment Contracts in Hong Kong
Employment contracts serve as a crucial purpose for both employers and employees. The contracts help employers document the terms of employment and safeguard themselves from potential legal issues. For employees, these contracts provide a written record that outlines their rights and benefits.
While it is not legally required, having an employment contract in writing is highly recommended. A written contract helps prevent misunderstandings and disputes regarding the terms of employment. Additionally, if a legal dispute arises, a written contract can serve as valuable evidence in court.
Here are some of the key things that to be included in an employment contract in Hong Kong:
- The job title and description
- The basic salary and benefits
- The working hours
- The probationary period
- The notice period for termination
- The severance pay
- The dispute resolution process
When drafting an employment contract in Hong Kong, it’s crucial to ensure fairness for both the employer and employee. The sample of employment contract can be downloaded from Labour Department of the Government of the Hong Kong Special Administrative Region.
Having written employment contracts in place allows employers and employees to protect their rights and interests.
Working Norms
Working hour in Hong Kong are generally similar to those in other Western countries. However, there are a few key differences, such as a typical work week being 40 – 48 hours. Employers need to be aware of the meal break and rest day.
Meal break: While there aren’t strict regulations on working hours, contracts will usually mention expected hours. The government recommends a 1-hour lunch break daily.
Rest day: For “continuous contracts” (an employee who has been employed continuously 18 hours weekly for at least 4 weeks), employees should get at least 1 day off every week.
Public Holidays
There are currently 13 statutory holidays in Hong Kong, and the government plans to increase progressively to 17 days by 2030. Shall an employee be required to work on a statutory holiday, then they are entitled to a substitute holiday within 60 days. If a statutory holiday falls on a weekend, the following workday should be a holiday. Employees cannot be compensated by cash or any form of payment for working on holidays.
Annual Leave
Employees are entitled to paid annual leave after 12 months of continuous employment. The amount of annual leave entitlement in Hong Kong depends on the length of service, with employees typically getting 7 days for the first year and 14 days for subsequent years.
While most white-collar jobs offer at least 14 vacation days, senior positions might offer 3-4 weeks. This is because senior positions often require more responsibility and commitment and employers may want to offer more paid leave to attract and retain top talent.
Beyond 10 days, employees can opt for payment in lieu for their vacation days. This means that they can choose to be paid for their unused vacation days instead of taking them off. This can be a useful option for employees who do not want to take all of their paid leave or who need the money.
Sick Leave
In Hong Kong, continuous contract employees are entitled to paid sick leave after 12 months of continuous employment. The amount of sick leave entitlement depends on the length of service which employees typically get 2 days per month for the first year and 4 days per month thereafter. The maximum sick leave entitlement is 120 days. Sick pay is equal to 4/5 of the employee’s average daily wage.
Maternity and paternity Leave
Eligible pregnant employees in Hong Kong get 14 weeks of paid maternity leave, given certain conditions. Maternity leave can be utilized either before or after the birth of the child. The employee is entitled to full pay during her maternity leave.
Similarly, eligible male employees are entitled to 5 days of paid paternity leave. The eligible criteria for paternity leave are the same as those for maternity leave. The paternity leave can be utilized either before or after the birth of the child. The employee is entitled to full pay during his paternity leave.
Healthcare Provisions in Hong Kong
There are both public and private healthcare systems. The public healthcare system is accessible and affordable for all residents, but wait times can be long. The private healthcare system is more expensive but it offers shorter waiting times and has a wider range of services.
Employers in Hong Kong can attract and retain top talent by offering good healthcare provisions. Employers can show their concern for employee health and well-being by providing quality healthcare benefits. This creates a positive work atmosphere where employees feel appreciated and respected.
Bonuses
In Hong Kong, it is not legally mandated to provide a 13th-month bonus. However, many employers commonly practice this tradition. This bonus is usually given out in December or January and is based on an employee’s performance during the previous year. In times of economic prosperity, these bonuses can be even more generous and sometimes amount to 2-3 months’ worth of salary.
The 13th-month bonus serves as a means for employers to acknowledge and reward their employees’ diligent efforts. It also assists in ensuring that employees can maintain a satisfactory standard of living particularly during the Chinese New Year season.
Termination & Severance
If you are an employer in Hong Kong, it is crucial to have a good understanding of the termination and severance laws applicable in the country. Since employment laws can be complex, it’s crucial to seek guidance from a professional to ensure that you’re complying with them.
Notice periods: The length of the notice period required for termination varies depending on the employee’s length of service. For the first month of employment, no notice is required. After the first month, the notice period is one week for each completed year of service.
Severance payment: An employee who is terminated by employer without cause may be entitled to severance pay. Severance payment is calculated based on the employee’s salary and length of service, but it is capped at HK$390,000.
Offsetting arrangement with the MPF system: Currently, there is an offsetting arrangement with the Mandatory Provident Fund (MPF) system for severance and long service payment. This means that employers can offset the amount of severance or long service payment that they owe to an employee with the amount of money that the employee has contributed to the MPF. However, this offsetting arrangement will end on May 1, 2025.
Tax & Mandatory Provident Fund (MPF)
It is imperative for all employers in Hong Kong to have a firm grasp of the country’s tax and MPF regulations.
Tax: Employers and employees are required to pay tax on salaries in Hong Kong. The tax rates vary depending on the employee’s income level.
MPF: The MPF is a mandatory retirement savings scheme in Hong Kong. Both employers and employees are required to contribute to the MPF. The contribution rate is typically 5% of the employee’s salary.
Conclusion
Partnering with an experienced agency like Fastlane Group allow you to with all of these steps.
Fastlane Group has widespread revel in within the Hong Kong market and knows the norms and legal necessities.
If you are a overseas enterprise looking to lease in Hong Kong, partnering with an experienced enterprise like Fastlane Group may be a wonderful way to streamline your system and appeal to and hold pinnacle talent.