【01】Which is the main legislation for labour matters in Hong Kong?

“I have just come to Hong Kong and know nothing about Hong Kong. By the way, which is the main legislation for labour matters in Hong Kong?”

 

The Hong Kong SAR has the Employment Ordinance (Cap 57), which came into force in 1968.

The Employment Ordinance, mainly aiming at protecting wages of employees, stipulates the minimum standard on employment conditions for employees. It is divided into 14 sections, including rules on employment contracts, end of year payment, maternity protection, rest days, wage payment, severance payment, long service payment, sickness allowance, holidays with pay and annual leave, etc.

The Employment Ordinance is applicable to all employees who are employed based on employment contracts in Hong Kong, as well as their employers. As an employer, it is essential to have sufficient understanding towards the Employment Ordinance as well as the other Ordinances (e.g. Discrimination Ordinances, Minimum Wage Ordinance, etc.) and reflect such understandings in daily management.

(＊) “The Employment Ordinance – Japanese Translation” published by Intelligence SMC Consulting Ltd. is available for sale. If you have any inquires or is interested in purchasing, please feel free to contact us.

 

 

【02】We plan to establish a company in Hong Kong. How can we prepare the Employment Contract?

We have decided to establish a company in Hong Kong, so we have to employ staffs. How can we prepare the Employment Contract?

 

The employment contracts are not necessary to be in writing. But we would suggest making the employment contract in written form.

And for written employment contracts, the way to make them varies from company to company. Some companies have their employment contracts consisting of both the employee handbook (for all staff) and the employment agreement (for individual staff), and other companies’ employment contracts only consist of the employment agreement.

The Employment Contract shall at least include terms and conditions on the commencement date of employment, salary (basic salary, allowances, etc.), calculation period of salary, title, length of probation period, leave and leave year, holidays, terminate procedure and the notice period for termination, confidentiality and non-competition clauses, and, if any end of year payment, its amount, pro-rata amount and calculation period of it, etc.

(＊)　We provide services of making and checking employment agreements and employee handbooks. We have been supporting over 360 companies in Hong Kong for making contracts. Please feel free to contact us for more information on those services.

 

 

【03】How much is the statutory minimum wage rate in Hong Kong?

“We are establishing a company in Hong Kong. For employing our staffs, we must decide salary. To begin with, how much is the minimum wage in Hong Kong?

 

The statutory minimum wage rate in Hong Kong is $37.5 (2019, May).

The Minimum Wage Ordinance in Hong Kong came into effect on 1st May 2011. Statutory minimum wage rate had not existed before that day. Though the statutory minimum wage rate is expressed in the form of hourly wage, it is also applicable to employees whose salary is calculated on a monthly basis. During the comparison which decides on if an employee whose salary is calculated on a monthly basis satisfies the statutory minimum wage requirement, please note that the calculation method may vary from case to case, depending on the employment condition of the employee.

In addition, the Hong Kong government will review on the statutory minimum wage level in the future. Please be aware of any updated information.

(*) For minimum wage, we have been providing the following consultations and information to our members.

・Minimum Wage Workshops (Cantonese and Japanese)

・Survey on Minimum Wage

・Amendment of employment agreements and employee handbooks on minimum wage-related clauses

・Individual consultation on how to take measures

・Providing the updated information, etc.

 

 

【04】Should a company pay so-called “Double Pay” to employees?

“We have heard that in Hong Kong, it is necessary to pay the “Double Pay”. Should a company pay “Double Pay” to employees?

 

According to the Employment Ordinance in Hong Kong, it does not stipulate that a company should pay the double pay (end of year payment) to employees. However, if an employer sets up rules of double pay and promises to pay it to employees, it is necessary for the employer to pay the amount promised to employees in accordance with the Employment Ordinance.

The Double Pay (“End of Year Payment”) is defined as “any annual payment (whether described as “thirteenth month payment”, “fourteenth month payment”, “double pay”, “end of year bonus” or otherwise) or annual bonus of a contractual nature” in Part IIA of the Employment Ordinance.

If a company has the double pay, it is essential to state the following in the employment agreement or the employee handbook.

・Payment period of double pay

・Amount of double pay

・Time of payment

Please note that under conditions that the payment of double pay is promised, if the above are not stated, the conditions stated in the Employment Ordinance shall be applicable.

In contrast to a double pay which is a bonus of a contractual nature, the “discretionary bonus” shall be paid at the sole discretion of an employer, depending on the company’s performance, the employee’s performance, working attitude, contribution to the company and the company’s expectations towards the employee. The company is under no obligation to guarantee any payment of a discretionary bonus and the minimum amount of such bonus.

 

 

【05】How many days of annual leave should a company grant to employees?

According to the Employment Ordinance in Hong Kong, the minimum number of annual leave entitlements are 7 days in the 1st year, 7 days in the 2nd year, 8 days in the 3rd year, 9 days in the 4th year, 10 days in the 5th year, 11 days in the 6th year, 12 days in the 7th year, 13 days in the 8th year, 14 days in the 9th year and thereafter.

 

According to the Employment Ordinance, the employee shall be entitled to 7 days of annual leave in his 1st year of employment.

However, the timing of annual leave days to be actually taken differs by 1 year from the timing of which the employee becomes entitled to the annual leave days. The Employment Ordinance stipulates the following:

“Annual leave to which the employee is entitled shall be granted by his employer and be taken by the employee within the period of 12 months beginning immediately after the expiration of the leave year to which it relates.”

In other words, annual leave entitlements in Hong Kong are available to be taken after a whole period of 12 months in employment.

Moreover, please note that the granting way of annual leave varies, depending on whether the company adopts the individual leave year (leave year refers to 1 year since the first day of employment of an individual employee) or the common leave year (leave year refers to 1 year since a specific day for all employees).

In addition, from the recruitment point of view, an increasing number of companies are providing annual leave days more than the stipulated minimum number of days in the Employment Ordinance for the 1st leave year.

(*) We have conducted a survey on benefits (employment terms & conditions apart from salary) including the number of annual leave. The survey report, “Japanese Companies Benefit Data Book”, is published for our members.

 

 

【06】Should a company grant sick leave to employees?

“Our staff who was sick / injured unrelated to work presented us with a sick leave certificate issued by a doctor and applied for sick leave. Is it a must for the company to grant him the sick leave?”

 

The number of sick leave days to be granted depends on factors, such as the company’s employment terms & conditions. “Sickness Allowance” is stipulated in the Employment Ordinance, if the conditions fit, the employee shall be entitled to the sickness allowance on the sickness days on which he is absent from work.

Points on the “sickness allowance” stipulated in the Employment Ordinance are as follows:

1) Conditions of Application

An employee has to take not less than 4 consecutive days as sickness days and is required to submit a sick leave certificate issued by a registered medical practitioner, Chinese medicine practitioner or registered dentist.

2) Number of Days of Entitlement

During the first 12 months of service, 2 paid sickness days for each completed month of service; and during the 2nd year of service and thereafter, 4 paid sickness days for each completed month of service. Sickness days entitlement may be accumulated up to a maximum of 120 days.

3) Payment for sickness days

Payment for sickness days shall be calculated at a rate of four-fifths (4/5) of the Employee's Average Daily Salary in respect of the number of sickness days taken.

Apart from the above, there are also companies providing “sick leave with pay” as an extra benefit, at the sole discretion of the company, in addition to the statutory entitlements.

(*) We have conducted a survey on benefits (employment terms & conditions apart from salary) including the number of annual leave. The survey report, “Japanese Companies Benefit Data Book”, is published for our members.

 

 

【07】We have heard that in Hong Kong, staff is not required to come back to work in times of

typhoon. Is this true?

“We have heard that in Hong Kong, staff is not required to come back to work in times of typhoon. How is this stipulated in law?”

 

There are no specific stipulation in law on work arrangements during adverse weather. On the other hand, it is in the guidelines issued by the Labour Department that arrangements, such as “release from work”, for the times of typhoon and rainstorm are mentioned.

The guidelines issued by the Labour Department on arrangements for the times of typhoon and rainstorm does not carry any legal power. However, the guidelines are generally followed and adopted by many companies.

＜Labour Department Guidelines: arrangements in times of Typhoon Signal No. 8 or above, or BLACK Rainstorm Warning＞

・If the typhoon signal or rainstorm warning is hoisted or issued before the starting time of work, the employee shall not be required to report for duty.

・If the Typhoon Signal No. 8 or Black Rainstorm Warning is cancelled or lowered by 3 hours before the finishing time of work, the employee shall report for duty within 2 hours from the time when the Signal or the Warning is lowered or cancelled.

・During working hours

　（1）　If the Pre-announcement of Typhoon Signal No. 8 or above is issued, employees shall be released from work in phases

　（2）　If Typhoon Signal No. 8 or above is hoisted, employees shall be released from work

　（3）　If Black Rainstorm Warning is issued, the Employee shall be instructed to remain in the workplace or take shelter

・No salary will be deducted in cases that the Employee is released from work.

 

(*) We issue newsletters to our members on arrangements in times of adverse weather.