Understanding The Hong Kong Employment Ordinance

The Employment Ordinance is the law that regulates employment in Hong Kong and is critical that the employers follow the rules and regulations as indicated in the ordinance.

Let’s explore the main points about employment that employers should be aware of.

What Are The Leave Entitlement Employees Have?

The employees who work in Hong Kong companies are entitled to the leaves mentioned below : 

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

Annual leave

Those who have been employed in a continuous offer for at least 12 months should receive paid annual leave.

The employees are granted paid leave as per their years of service.

Sick leave

Employees have a right to two days of paid sick leave per month while in the first year of employment.

At the end of one year, the employee will be given 4 paid sick days that will be accumulated to a maximum of 120 days of sick leave.

Medical certificates are requested by the employer if the employee is absent for more than three days.

Maternity leave

As female employees under a continual contract, they get 14 weeks of maternal leave pay.

In the case that the employee has worked more than 40 weeks, she will also be eligible for a maternity leave allowance which is four-fifths of her daily average wage.

Paternity leave

According to the policy, every male employee is granted with the right to take five days of paternity leave after giving birth to their child. If the employee has been working more than 40 weeks without any break, the provision of paternity leave is available at the rate of four-fifths of the total average daily wages. 

Statutory holidays

Currently, Hong Kong has 14 statutory holidays and the employees who have served for about 3 months or more are entitled to paid statutory holidays. Read Hong Kong 2024 Public Holidays

Rest day

A rest day is a constant period of no less than 24 hours and every employee under a contract of continuous work is entitled to one off day every seven days.

Regular And Overtime Working Hours In Hong Kong

In Hong Kong, there is no standard requirement regarding regular office hours or overtime work hours. The working hours can be decided together by the employer and the employee.

Probation period

How long is the probationary period?

In Hong Kong, the probation period is typically from one to three months.

If the employee is dismissed during the first month of the probation period, then the employer does not need to notify him with any prior notice but if the employee is terminated after the first month, the employer should notify at least one week in advance. 

Termination of employment

Termination notice

As per section 6 of the Employment Ordinance, the required length of notice when it comes to terminating the contract of the employee is: 

• If a contract of one month can be renewed month by month and it does not make provisions on the amount of notice required to get a termination of the contract, then not less than one month.
• In a contract for one month renewable from month to month, or more, and when it provides the length of a notice period required to terminate the contract, the agreed time period should be, but not less than, seven days.
• In all the other cases, the agreed period but no shorter than seven (7) days.

Severance payment

As stipulated in section 31B of the Employment Ordinance, severance payment (SP) should be given to the employees under a continuous contract for at least 24 months when the employee is : 

• dismissed because of redundancy
• laid off

SP is calculated by the following:

• Salaried employee – two-thirds of the last full month’s salary or two-thirds of HKD 22,500 
• The two options are a daily-paid employee or a piece-rate employee – 18 days’ wage decided by the employee from the last 30 working days, or two-thirds of HKD 22,500, whichever is less. 

Long service payment

Employees who have been in employment for at least five years qualify for long service payment (LSP) if the employee : 

• is dismissed
• terminates the contract and is under the age of 65 and employed for five years at least.

LSP can be calculated by the below methods: 

• Salaried employee – about two-thirds of the natural 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 of the last 30 working days taken by the employee, or two-thirds of HKD 22,500, whichever is less multiplied by the number of years of service.

Employers can be given the option of off-setting the LSP and SP paid to employees in accordance with the Employment Ordinance. They can then apply these against the Mandatory Provident Fund (MPF) that has been derived from both employer and voluntary contributions.

Employment and wage records

The employers are responsible for maintaining records of the wages and the employment history of every employee respectively for the past 12 months.

The following information should be included in the record : 

• The employee’s name and National ID card number
• The commenced date of the employment
• Job title
• Wage rates of each wage period.
• Wage period
• Annual leave, maternity leave, sick leave, paternity leave and holidays
• Number of end-year annual payment
• Termination notice of the contract.
• The termination date of the employment.

Hiring foreign employees

Companies based in Hong Kong are allowed to hire foreign workers with a unique set of skills, experience, or knowledge that will be useful but not available in Hong Kong. 

The foreign employee must hold a legitimate work visa, and the employer is responsible for applying on behalf of the employee.

Conclusion

The requirements mentioned in this article include some fundamental rights that an employee is entitled to and the responsibilities that an employer has towards employees. If you are looking for expert assistance for human resources-related issues, FastLane Group is ready to help you. Contact us now for more details!