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Key Country Facts

Currency: Hong Kong Dollar (HKD)

Time zone: GMT +8

Official language: Chinese (Cantonese)  and English are the official languages of Hong Kong. English is widely used in the Government and by the legal, professional and business sectors. Trilingual professionals who speak English, Cantonese and Putonghua play a vital role in the numerous enterprises trading in Hong Kong or doing business with mainland China and Taiwan.

Employment Contracts

The Employment Ordinance (EO) is the key legislation that spells out the basic terms and conditions that govern employment laws in Hong Kong.

The employment contract specifies the agreed upon terms and conditions of employment between the employer and employee. The contract includes both explicit and implied terms.

Employment contracts can be oral or written. According to the EO, verbal employment agreements are legal. If contracts are in the written form, it is mandatory for employers to provide employees with a copy of the written employment contract. In addition, employers must obtain their employees’ consent before making any subsequent changes to the terms of the employment contract.

Employment contracts can be bespeaking if they contain the minimum requirements. The Labor Department offers standard templates.

Blue-collar workers contracts are normally in Chinese. White-collar or professional jobs are usually in English.

Hong Kong Holidays

Occasion Date
New Year’s Day * Jan 1
Lunar New Year * Feb 12
The Second Day of Lunar New Year * Feb 13
The Fourth Day of Lunar New Year * Feb 15
Good Friday Apr 2
The Day Following Good Friday Apr 3
The Day Following Ching Ming Festival * Apr 5
The Day Following Easter Monday Apr 6
Labour Day * May 1
Birthday of Buddha May 19
Tuen Ng Festival * Jun 14
HKSAR Establishment Day * Jul 1
The Day Following Mid-Autumn Festival * Sep 22
National Day * Oct 1
Chung Yeung Festival * Oct 14
Christmas Day * Dec 25
The First Weekday After Christmas Day Dec 27

The EO specifies 12 statutory holidays (*) that must be granted to all employees. If the employee has been employed continuously for three months and works for at least 18 hours/week, he/she will be entitled to paid leave on a statutory holiday as mentioned above (*).

There are five additional general holidays specified in the General Holidays Ordinance, which are only guaranteed to certain employees (such as civil servants). However, many employers also treat these as paid holidays.

Vacation

Entitlement to annual leave for the first year is seven days and is accumulated at the rate of one day for each completed year, up to a maximum of 14 days:

  • 1st year: seven days
  • 2nd year: eight days
  • 3rd year: nine days and so on, up to a maximum of 14 days

The EO also permits employees to carry forward all untaken annual leave for 12 months after the preceding leave year.

Sick Leave

Employees are entitled to paid sick leave at the rate of 4/5ths of the employee’s average wage over the preceding 12-month period. An employee who has been employed under a continuous contract for a period of at least one month immediately preceding a sickness day is entitled to paid sickness allowance in accordance with the EO.

An employee must produce a medical certificate issued by a medical practitioner or registered dentist in respect of any sickness day for which he/she is claiming statutory sickness allowance for and if he/she fails to do so, the employer is not liable to make any payment for that particular day.

Maternity/Paternity Leave

A female employee who is employed under a continuous contract of employment (i.e. she has been employed for four or more weeks and has worked at least 18 hours in each week) immediately before the expected date of her commencement of maternity leave, is entitled to take maternity leave in accordance with the EO (or as provided by the terms agreed with by the employer, whichever is more favorable).
To qualify for paid maternity leave, which is applicable only to the 10-week maternity leave period, the employee must:
  • Has been employed for a period of at least 40 weeks immediately before the expected date of commencement of maternity leave.
  • Has given the required notice, and
  • Has complied with the requirements for the provision of medical certificates referred to above.

Maternity leave pay is paid at the rate of 4/5ths of the employee’s average wage over the preceding 12-month period.

Male government employees employed under a continuous employment contract are eligible to take a 5-day paternity leave on full pay on the birth of each child.

Termination/Severance

As per contract, but at least seven days. The common practice is one month. In the absence of a contract: one month.

Employees Entitlements on Termination:

  • Accrued wages and unused annual leave: All outstanding wages and payments in respect of accrued but unused annual leave (only statutory leave, unless contract specifies otherwise) up to the time of termination are payable.
  • End of year payments: Where the employees are contractually entitled to an annual bonus, they will be entitled to a proportional payment thereof in respect of the year in which they are dismissed, unless the bonus is payable solely at the discretion of the company or they have not been employed for a continuous period of three months or more in the payment period. If an end of year payment is not specified in the employment contract, a sum equaling to the monthly average wage of the employee will be awarded.
  • Severance pay: Any employee who has been employed under a continuous contract for at least 24 months is entitled to severance payment if dismissed by reason of redundancy or if the employee is laid off.
  • Long service pay: Any employee with at least five years of service (other than an employee who retires) will be entitled to a long service payment if he/she is dismissed and his/her employer is not liable to pay them a severance payment. “Dismissal” has the same meaning as that under the provisions relating to severance payments described above.

Bonus

Many employers in Hong Kong pay a 13th month bonus before Chinese New Year, although the trend is to replace this with a performance related bonus. MNCs will normally pay discretionary bonus as well.

Hong Kong Social Security

Social Security System Monthly Salary Cap
(HKD)
 Employer Contribution  Employee Contribution
Mandatory Provident Fund (MPF) 30,000 5.00% 5.00%
Employment Insurance Depends on industry

Up to 2.00% of compensation

0.00%

Hong Kong Health Insurance Law

Employer may provide or employee may arrange himself/herself. Supplemental insurances include Accident/Medical/Dental/Life insurance. Common additional benefits depend on the company.

This information does not constitute legal advice.

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