Employment law in Hong Kong

Updated on
Le droit du travail à Hong Kong
Many are willing to give up the framework and stability of French employment law to settle in Hong Kong. If the figures are to be believed, the French community has experienced the strongest growth in Hong Kong over the past five years. Unlike French law, Hong Kong law is not advantageous to employees and is not strictly regulated. Indeed, Hong Kong law is much less protective of employees’ interests. This, however, is a boon for employers.

Employment law in Hong Kong   

In Hong Kong, there is no Labour Code, but rather a law called the “Employment Ordinance” (Chapter 57 of the Laws of Hong Kong). This law is the reference text for employment law and is also regarded as the most liberal in the world for employers. However, do not think that employees are deprived of rights; in fact, their rights have been strengthened in recent years. There are also other legal texts that are used in specific contexts:
  • a law concerning employment contracts that were concluded outside Hong Kong;
  • a law prohibiting discrimination based on the employee’s sex;
  • a law prohibiting racial discrimination.
In recent years, China has tried to align itself as closely as possible with European standards regarding employer-employee relations.

Employment contracts

Hong Kong is considered one of the most densely populated regions in the world, with 7.2 million inhabitants. The official languages for employment contracts in Hong Kong are either Chinese or English. Your employment contract will necessarily be written in one of these languages. First, the prospective employee receives an offer letter detailing the compensation terms in Hong Kong dollars. If you are a foreign national, Hong Kong Immigration will require you to have a visa and a work permit. Similar to the system in the United Arab Emirates, expatriates must have a sponsor to obtain a work permit. This sponsor is none other than their employer.

Hiring foreign employees

Foreign workers must have the appropriate visas and work permits for Hong Kong, in accordance with immigration laws. Certain nationalities are permitted to enter Hong Kong without a visa, but may not be able to apply for a work visa while staying in Hong Kong. An employer is required to sponsor an employee so that they can obtain a work permit. This requires local registration and a license, which may involve a lengthy process, depending on the type of business structure.

Dismissal in Hong Kong

The notice period for dismissal varies depending on the duration of the employment contract. Generally, after the probationary period, the notice period is usually one month. Regarding severance pay, employees with between 2 and 5 years of service with the company are eligible for severance pay.

Salaries in Hong Kong

Minimum wage

Since 2020, according to the Hong Kong authorities, the minimum wage for employees has been set at HKD 37.5. Note that this minimum does not apply to domestic workers. Most of these workers, who are women from the Philippines or Indonesia, reportedly earn HKD 4,310 per month.

Average salary

According to the Hong Kong Labour Department, the average gross monthly salary is HKD 20,500. However, there are also very significant wage disparities, with extremely high and very low salaries.

Working hours

No law regulates the number of weekly working hours. In Hong Kong, the statutory working time is 40 to 48 hours per week. Employees generally start work at 7 a.m. and finish at 7 p.m. Generally, employees are allocated only one rest day over a period of 7 working days.

The working week in Hong Kong

Unlike in many other jurisdictions, no law regulates the number of working hours per week. However, employees must be given at least one rest day in every seven working days.

Leave policy in Hong Kong

Paid leave in Hong Kong

The amount of paid leave varies according to the employee’s length of service with the company. The number of days can range from 7 to 14 days. Employees receive the maximum annual leave entitlement only after 9 years of service. In practice, employers generally grant employees 14 days of paid leave, and three to four weeks for senior executives.

Sick leave in Hong Kong

In Hong Kong, every employee is entitled to two days of paid sick leave per month at the employer’s expense during the first year, followed by four days per month in subsequent years, up to a limit of 120 days per year.

Public holidays

Hong Kong has a number of public holidays. If an employer requires an employee to work on one of these days, they must offer the employee another public holiday within the two months before or after the holiday. If the public holiday falls on a weekend, the employee should be allowed to take the following working day instead of the public holiday. Here is a list of public holidays in Hong Kong:
  • New Year's Day
  • Lunar New Year's Day
  • The day after and the third day after the Lunar New Year
  • The Ching Ming Festival
  • Labour Day
  • The Tuen Ng Festival
  • The Establishment Day of the Hong Kong Special Administrative Region
  • The day after the Chinese Mid-Autumn Festival
  • The Chung Yeung Festival
  • National Day
  • The Chinese Winter Solstice Festival or Christmas Day, at the employer's discretion
At the employer's discretion, they may offer you 5 additional days of leave. Namely:
  • Good Friday
  • The day after Good Friday
  • Easter Monday
  • The Buddha's Birthday
  • The day after Christmas Day

Social security in Hong Kong

Hong Kong's healthcare system is considered one of the most efficient in the world, and the care provided in Hong Kong's facilities is of very high quality. However, medical costs are also ranked among the most expensive in the world.

Contributions

Regarding employer contributions, employers are required to deduct 5% and pay an additional 5% into the Mandatory Provident Fund (MPF). Regarding employees with a monthly income above HKD 7,100, a 5% tax deduction (capped at HKD 1,500) will be made from their salary and collected as a contribution to the Mandatory Provident Fund (MPF). Employees, for their part, subscribe to mandatory provident funds managed by private funds. There is also a government social security scheme reserved exclusively for the most vulnerable people.

Corporate tax in Hong Kong

The tax system in place in Hong Kong is considered highly attractive! It should be noted that Hong Kong tax is levied on a territorial basis, meaning that only income generated in Hong Kong is taxed. The rate for profits generated in Hong Kong is 16.5%. Our firm has been present in Hong Kong since 1998. In addition to incorporating companies in Hong Kong, we are authorized to act as your Company Secretary as stipulated by Hong Kong law. Our team consists of legal and accounting professionals who are at your service to ensure the success of your business activities in Hong Kong and throughout the world. Contact us at +971 52 820 0964 or email us: support@merritt.group
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