Employment laws in Hong Kong
The employment laws in Hong Kong set strict rules on wages, leave, and termination. Before signing employment contracts in Hong Kong, know the labor laws.
The legal framework of Hong Kong’s employment is shaped primarily by the Employment Ordinance (Cap. 57). The employment laws in Hong Kong are among the most structured pieces of labor legislation in Asia.
The labor laws in Hong Kong govern everything, right from probation terms and rest days to end-of year payments and wrongful dismissal remedies. To maintain labor law compliance in Hong Kong, employers draw sharp distinctions between employees and contractors to reduce the scope for misclassification.
Navigating the employment laws and employee rights in Hong Kong might be difficult for employers and employees, respectively.
However, Payoneer Workforce Management, an EOR platform, helps with these, along with assisting with employee onboarding, payroll management, labor law compliance, taxation, and more.
Key employment laws in Hong Kong
The Employment Ordinance (Cap. 57) is the cornerstone of Hong Kong’s labor law. The law covers all important aspects such as wages and payments, severance pay, notice period, rest days, and more.
Apart from this, there are other labor laws in Hong Kong, which are equally important and have similarities with employment laws in South Korea. Some of them are as follows:
- Mandatory Provident Fund (MPF) Ordinance (Cap. 485) – The MPF system is the mandatory retirement savings scheme in Hong Kong. Both the employers and employees have to contribute 5% according to the employee’s relevant income.
- Minimum Wage Ordinance (Cap. 608) – The Minimum Wage Ordinance typically establishes a statutory minimum wage floor for all employees in Hong Kong, with limited exceptions.
- Occupational Safety and Health Ordinance (Cap. 509) – This ordinance provides employers with a statutory duty of maintaining health and safety at the workplace. Breach of these duties can lead to fines.
- Sex Discrimination Ordinance (Cap. 480) and Race Discrimination Ordinance (Cap. 602) – Both these anti-discrimination ordinances are enforced by the Equal Opportunities Commission (EOC).
- The Sex Discrimination Ordinance prohibits discrimination on the grounds of marital status, sex, or pregnancy.
- The Race Discrimination Ordinance, on the other hand, prohibits discrimination on the grounds of color, race, descent, or ethnic origin.
- Disability Discrimination Ordinance (Cap. 487) – This ordinance protects individuals with disabilities in employment and other areas.
Contract employment laws in Hong Kong
The Employment Ordinance (Cap. 57) includes all the details present in the employment contracts in Hong Kong.
The contracts can be in a written or verbal format. However, the written format is strongly recommended. The contract can be in English and should contain all essential terms and conditions of the employment.
Types of contract
Employment contracts in Hong Kong are primarily of two types:
- Permanent/ Definite contract (Continuous contract)– This is typically one of the most protected forms of employment contract in Hong Kong. This contract is usually for open-ended or permanent roles.
- To be eligible for a continuous contract, the employee must remain employed by the same employer for 4 weeks or more and work at least 17 hours each week.
- Indefinite/ Fixed-term contract (temporary contract) – This is an employment contract with a fixed start and end date. These contracts may be renewable; it’s important to refer to local rules when drafting contracts or take assistance from an EOR with local expertise in Hong Kong.
Essential contract terms
A written employment contract sets out the rights and duties of both employers and employees in Hong Kong. Here are the essential contract terms:
- Details of the employer and employee
- Date of commencement of employment
- Probation period
- Job role and the position of the employee
- Working hours and overtime
- Wages
- Leave entitlements
- Employee benefits
- Termination
Minimum wage in Hong Kong
The payout currency in Hong Kong is the Hong Kong Dollar (HKD, HK$).
The minimum wage in the country is HK$40 per hour.
Working hours in Hong Kong
There are no statutory working hours in Hong Kong. The working hours are determined by a mutual agreement between the employer and the employee.
Just like working hours, there are no overtime laws in Hong Kong. There are no statutory overtime rates in the country. The rates depend on the employment contract. Moreover, there are no restrictions on overtime hours in Hong Kong. Employers must have reasonable justifications to tell employees to work overtime.
Mandatory benefits
As an integral part of employee rights in Hong Kong, employees are entitled to certain mandatory benefits in the country. Here are the details:
| Mandatory benefits | Details |
|---|---|
| Public health insurance | The government provides subsidized public health services in Hong Kong through the Department of Health (DH) and the Hospital Authority (HA). Legal residents with a Hong Kong identity card can access public healthcare services at a highly reduced rate. Residents don’t have to pay any mandatory public health insurance contribution. |
| Social security | There is no traditional social security scheme in Hong Kong. The majority of employers and employees make contributions to the Mandatory Provident Fund (MPF). This is a compulsory retirement savings scheme in the country. Self-employed people and employees in the age group between 18 and 65 years, working in Hong Kong, have to participate in the MPF scheme. Both employee and employer have to contribute 5% of the employee’s relevant income. This is subject to both minimum and maximum income thresholds. |
| Sick leave | Employees are entitled to sick leave in Hong Kong. The duration of the leave depends on the employment service period. For the first year of employment, employees are entitled to 2 paid sick days per month. Subsequent years – 4 paid sick days per month (48 days annually) Maximum accumulation of sick leave – 120 days |
| Maternity leave | Female employees are entitled to maternity leave for 14 weeks. The female employee must be employed under a ‘continuous contract’ with the employer for not less than 40 weeks immediately before taking the maternity leave. |
| Paternity leave | New fathers in Hong Kong are entitled to 5 days of paternity leave. Similar to maternity leave in Hong Kong, the employee must be a permanent one. The employment tenure must not be less than 40 weeks before taking the paternity leave. |
| Annual bonus | In Hong Kong, an annual bonus for employees is not mandated by law. In some organizations, an annual bonus is given at the employer’s discretion. |
| Annual leave | The annual or earned leave in Hong Kong is based on the employee’s employment service tenure. 1 – 2 years of service: 7 days annual leave 2 – 3 years of service: 8 days annual leave 4 – 5 years of service: 9 days annual leave 5 – 6 years of service: 10 days annual leave 6 – 7 years of service: 11 days annual leave 7 – 8 years of service: 12 days annual leave 8 – 9 years of service: 13 days annual leave 9 or more years of service: 14 days annual leave |
| Public holidays | In Hong Kong, there are 14 statutory holidays and 4 additional general holidays. Here is a list of the public holidays in: The first day of January Lunar New Year’s Day The second day of the Lunar New Year The third day of the Lunar New Year Ching Ming Festival Labour Day The Birthday of the Buddha Tuen Ng Festival Hong Kong Special Administrative Region Establishment Day National Day The day following the Chinese Mid-Autumn Festival Chung Yeung Festival Chinese Winter Solstice Festival or Christmas Day (at the option of the employer) The first weekday after Christmas Day |
Termination
Termination of employees in Hong Kong can take place based on valid grounds. In case an employer terminates an employee without valid and logical reasons, it is considered unfair dismissal. This can lead to legal hassles for the employer. Termination cases vary from one another and should be handled with care.
Types of termination scenarios
Here are some of the most common termination scenarios in Hong Kong:
- Termination during probationary period
- Voluntary resignation by the employee
- Termination by the employer due to performance issues, misconduct, theft, absence without leave, and so on
- Mutual agreement between the employee and the employer
Notice period in Hong Kong
Employees have to serve a notice period in Hong Kong during and after the probation period.
- If the termination is within the first month of the probation period, no notice period is needed. However, after the first month, the employee has to serve a notice period of a minimum of 7 days.
- The notice period after the probation period in Hong Kong is a minimum of 1 month, unless mentioned in the employment contract. The notice period cannot be less than 7 days if specified in the contract.
Severance payable
According to termination laws in Hong Kong, employees are entitled to severance pay if their employment ends under certain circumstances.
- Severance payment in the country is calculated at the last month’s salary (capped at HKD 22,500) x ⅔ x years of service. The total is capped at HKD 390,000.
Here are the circumstances in which employees will get severance pay in Hong Kong:
- Retirement of the employee at or after 65 years of age
- Death of the employee (payment is transferred to the estate)
- Dismissal by the employer not due to redundancy or severe misconduct
- Resignation due to ill health, certified by a registered physician
- Expiry of a fixed-term contract, not renewed by the employer
Navigate employment laws in Hong Kong with trusted support
Compromising labor law compliance in Hong Kong can be unfavorable to the employer. This may lead to legal consequences, including penalties and fines. Hence, it is mandatory for employees and employers alike to know the employment laws in Hong Kong well.
If you find it difficult to understand the labor laws in Hong Kong, Payoneer Workforce Management, an EOR platform, is ready with assistance. The EOR service typically extends help and support with taxation, payroll management, employee onboarding, leave tracking, and more.
Frequently asked questions (FAQs)
Payoneer Workforce Management offers a trusted and reliable EOR that helps streamline payroll, employee onboarding, and offers navigation support with statutory contributions, and maintains labor law compliance in Hong Kong, as per the Employment Ordinance (Cap. 57). The EOR service also assists in making employee and cross-border contractor payments accurate, efficient, and fully audit-ready.
Both employers and employees must each contribute 5% of the employee’s relevant income to the MPF scheme. Contributions are compulsory for employees aged 18 to 64 who have been employed for 60 days or more.
Female employees under a continuous contract are entitled to 14 weeks of paid maternity leave. Male employees are entitled to 5 days of paid paternity leave, provided they meet the eligibility criteria under the Employment Ordinance (Cap. 57).
Yes, employees have a probation period in Hong Kong, which is typically 1 to 3 months. However, the probation period can be extended to 6 months, depending on the particular case.
An employment contract in Hong Kong should include the job role, salary, working hours, probation period, leave entitlements, benefits, termination terms, and employment start date. Written contracts are strongly recommended for clarity and legal compliance.
There are no statutory working hours or overtime laws in Hong Kong. Working hours, overtime pay, and related conditions are usually agreed upon between the employer and employee and mentioned in the employment contract.
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