Hire in Hong Kong

Although not legally required, it is best practice to put a written employment contract in place which should outline the basic terms of employment including:

• Identification of both parties 
• Date of commencement (and employment duration for temporary contracts) 
• Workplace
• Job description, duties and responsibilities
• Basic salary as well as other compensation or bonuses and payment details
• Working hours 
• Total number of holidays
• Notice periods for employment termination
• Probation

In case the employment agreement is concluded verbally, the employer is obligated to provide the newly hired employee with a written statement containing the relevant information mentioned above. Employment contracts in Hong Kong may either be in Chinese or English.

Probation Period

Probationary periods in Hong Kong usually range from one to three months. The exact duration is to be specified in the individual employment contract.

Working Hours and Breaks

The Employment Ordinance which mainly governs Hong Kong’s labour law regulations does not specify any restrictions on working hours – except for employees who are underage. The only legal requirement concerning working time is that employees should receive at least one day off per week.

Overtime

There are no legal regulations on overtime work either. 

It is common practice to pay employees on a monthly basis. 

Minimum Wage

Hong Kong’s minimum hourly wage rate is currently set at HKD 37.50.  

Sick Pay

After four consecutive days of sickness-related absence from work, employees are entitled to sick pay equal to four fifths of their usual daily wages. However, it is mandatory to provide a medical certificate. 

The number of earned paid sick days depends on the employee’s length of service. It is two days for each month during the employee’s first year at the company and four days per month for every additional year. Unused paid sick days can be accumulated and used at a later occasion – capped at a total of 120 sick days.

Bonuses

Employees who are continuously employed by the same employer and who have completed at least one full year of employment are legally entitled to an annual bonus. Unless specified otherwise in the employment agreement, the annual bonus should equal a 13th salary.

Employees and employers in Hong Kong are subject to the following tax and social security contribution rates (as of 2021):

Annual Leave

Annual leave entitlements in Hong Kong increase progressively starting from seven days of paid leave during the first two years of service. After nine years of service, the employee receives 14 days off each year which is the maximum that can be granted. Unused leave can either be cashed out or carried over into the next year – pay in lieu of time off is only possible for that part of the leave exceeding ten days. 

Public holidays are not included in this scheme. Employees in Hong Kong enjoy 17 public holidays. Some companies grant their employees up to five additional holidays over Easter and Christmas.

Maternity Leave and Paternity Leave

Female employees who have completed at least 40 weeks of service and who have given their employers due notice of their pregnancy are entitled to 14 weeks of maternity leave – extendable by another four weeks in case of complicated births. Maternity leave can start either two or four weeks prior to the expected due date. 

During maternity, the employee should be paid four fifths of her usual wages. Employers have the option to be reimbursed by the government for payments issued during the eleventh and fourteenth week of maternity leave.  

Fathers are allowed to take five days of paternity leave if they give notice to their employer at least three months prior to the baby’s birth. While on leave, they receive four fifths of their regular daily pay.

Parental Leave

The Employment Ordinance does not provide for any further parental leave. 

Additional Leave and Benefits

Further leave entitlements or benefits are subject to the individual employment agreement.

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In addition to employment termination by default – i.e. in case of a fixed-term contract – resignation and mutual agreement, employment may be terminated due to one of the following reasons (non-exhaustive list):

• redundancy or other economic reasons leading to the suppression of the employee’s position
• summary dismissal due to severe misconduct or breach of employment contract
• employee’s underperformance
• employee’s long-term illness

Notice periods range from seven days to one month, depending on the employee’s length of service and whether or not the employment parties have agreed on special probation and notice periods. Notice should be given

• at least seven days before the intended end date – after the first month of the probationary period and at any point thereafter if agreed upon in the employment contract
• at least one month before the intended end date – after the trial period in cases where the employment contract does not define another notice period

During the first month of the employee’s probation period, neither the employer nor the employee have to give any notice. In case of a summary dismissal due to the employee’s behaviour, employers also have the right to dismiss an employee with immediate effect. Payment in lieu of notice is legally permitted.

Employees whose length of service exceeds 24 months and who are terminated due to redundancy are entitled to severance pay equal to two thirds of their monthly wages for each year of service they completed with the employer. Furthermore, employees with more than five continuous years of service who are dismissed by any reason but misconduct or redundancy have the right to a long service payment which is calculated in the same way as severance pay. 

All employees must receive any outstanding payments upon termination, regardless of the reason for dismissal.