[hold for cover]
2024
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K&L Gates
| Global Employer Guide – Hong Kong | 2024
CONTENTS
Introduction _____________________________________________________________________ 4
Employment Relationships ________________________________________________________ 5
I. Pre-Employment ____________________________________________________________ 5
Immigration/Visa Requirements ________________________________________________ 5
Reference/Background Checks ________________________________________________ 5
Police and Other Checks _____________________________________________________ 5
Medical Examinations ________________________________________________________ 5
Minimum Qualifications _______________________________________________________ 5
II. Types of Relationships _______________________________________________________ 5
Employee _________________________________________________________________ 5
Independent Contractor ______________________________________________________ 5
Labor Hire _________________________________________________________________ 6
III. Instruments of Employment ___________________________________________________ 6
Contracts __________________________________________________________________ 6
Codes of Rules _____________________________________________________________ 6
Registered Agreements ______________________________________________________ 6
Policies ___________________________________________________________________ 6
IV. Entitlements _______________________________________________________________ 6
Minimum Employment Rights __________________________________________________ 6
Discretionary Benefits (Bonuses) _______________________________________________ 7
Termination of Employment _______________________________________________________ 8
I. Grounds __________________________________________________________________ 8
II. Minimum Entitlements ________________________________________________________ 8
III. Redundancy _______________________________________________________________ 8
Genuine Redundancy ________________________________________________________ 8
Consultation _______________________________________________________________ 8
Payment __________________________________________________________________ 8
IV. Remedies _________________________________________________________________ 9
Dismissal Action ____________________________________________________________ 9
Business Transfer and Restructuring _______________________________________________ 10
I. Legal Requirements ________________________________________________________ 10
Transfer of Business ________________________________________________________ 10
II. Restructuring ______________________________________________________________ 10
Notification _______________________________________________________________ 10
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| Global Employer Guide – Hong Kong | 2024
Consultation ______________________________________________________________ 10
Protection of Assets _____________________________________________________________ 11
I. Confidential Information _____________________________________________________ 11
II. Contractual Restraints and Non-Competes ______________________________________ 11
III. Privacy Obligations _________________________________________________________ 11
IV. Workplace Surveillance _____________________________________________________ 11
V. Workplace Investigations ____________________________________________________ 11
Workplace Behavior _____________________________________________________________ 12
I. Managing Performance and Conduct ___________________________________________ 12
II. Bullying and Harassment ____________________________________________________ 12
Bullying __________________________________________________________________ 12
Harassment _______________________________________________________________ 12
III. Discrimination _____________________________________________________________ 12
IV. Unions ___________________________________________________________________ 12
Representation ____________________________________________________________ 12
Right of Entry _____________________________________________________________ 13
Industrial Disputation _______________________________________________________ 13
V. Remote/Hybrid Work ________________________________________________________ 13
Work From Home __________________________________________________________ 13
Authors and Contributors ________________________________________________________ 14
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K&L Gates
| Global Employer Guide – Hong Kong | 2024
INTRODUCTION
With the pandemic in the rearview mirror and the scrapping of almost all its COVID-19 rules in
December 2022, Hong Kong has reopened for business. Hong Kong’s gross domestic product growth
forecast is expected to hit 4% to 5% for 2023, and its jobless rate has dropped to 3.1% for the 12th
straight decline—all strong indicators that Hong Kong’s post-COVID-19 economic recovery is well
underway.
Yet, the challenges resulting from the pandemic have changed the workforce in Hong Kong. The
pandemic saw a surge in people leaving Hong Kong, tightening the city’s talent pool. The government
has introduced measures, such as the Top Talent Pass Scheme and relaunching of a new Capital
Investment Entrant Scheme, to address the talent shortage. Generally, employees are taking a more
transactional work approach. Salary remains the top motivator for employees considering a job move,
but other considerations, such as flexible work arrangements, have become increasingly important.
Employers who better understand and cater to this shift in the workforce by offering a well-defined
employee value proposition that extends beyond mere salary and flexibility will have a significant
advantage when it comes to attracting new talent and retaining employees.
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K&L Gates
| Global Employer Guide – Hong Kong | 2024
EMPLOYMENT RELATIONSHIPS
I. PRE-EMPLOYMENT
Immigration/Visa Requirements
Employers must ensure their employees are lawfully allowed to work in Hong Kong. Foreign workers
must possess the necessary work permit.
Visas to live and work in Hong Kong can be either temporary or permanent. There are a number of
different types of visas administered by the Hong Kong Immigration Department depending on
whether the worker is a professional (university graduate or above), imported worker (technician level
or lower), domestic helper, or from mainland China.
The Employment Ordinance requires that, prior to employing a person, employers must inspect the
person’s Hong Kong identity card or, if the person does not have one, his or her passport.
Reference/Background Checks
An employer requires consent from the applicant before it may contact a prospective employee’s
references and previous employers to gather and verify information.
Police and Other Checks
Police checks on a prospective employee are not permitted.
Employers of persons undertaking child-related work and work relating to mentally incapacitated
persons can ask prospective employees to undergo a sexual convictions record check to determine
the suitability of the prospective employee for that employment.
Medical Examinations
Medical examinations are permitted with the applicant’s consent if it is necessary to determine his or
her fitness for a particular job. Obligations exist regarding obtaining and handling personal data by
employers (or prospective employers).
Minimum Qualifications
Businesses may ask for minimum qualifications to ascertain an applicant’s suitability for a role.
II. TYPES OF RELATIONSHIPS
Employee
Individuals can be employed on a full-time or part-time basis, on a fixed-term or ongoing contract, or
on a casual basis. Employees garner different entitlements depending on the basis on which they are
employed.
Independent Contractor
Businesses often engage independent contractors on a fee-for-service basis. A business will usually
engage the independent contractor by means of a service agreement with the individual or with the
individual’s business.
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Labor Hire
Labor hire workers are often engaged for short periods and are common in certain industries, such as
building and construction and information technology. Such workers may be employees or contractors
of the labor hire firm.
III. INSTRUMENTS OF EMPLOYMENT
Contracts
Employment contracts can be oral or in writing. However, if the contract is not of the type that renews
from month to month, then under Section 5(2) of the Employment Ordinance, it must be in writing and
signed by both parties.
While it is customary for the terms of employment to be expressly set out in a formal contract or offer
letter and agreed on between the parties, they may also be implied by law and by application of the
Employment Ordinance.
Codes of Rules
Not applicable in Hong Kong.
Registered Agreements
Not applicable in Hong Kong.
Policies
Policies are not mandatory, but they are strongly advised. Policies that should exist include those
relating to discrimination, harassment, victimization, and work health and safety.
IV. ENTITLEMENTS
Minimum Employment Rights
Wages
Effective from 1 May 2023, the statutory minimum wage is HK$40 per hour.
Unless otherwise agreed, there is a presumption in the Employment Ordinance that the wage period
is one month. Wages must be paid as soon as practicable, but not later than seven days after that
time.
If the employee’s contract contains a contractual right to an end-of-year bonus payment but the
employee has only completed part of the year, the employee is entitled to a pro rata payment
provided the period of employment during the relevant year has been at least three months.
Leave Entitlements
Employees in Hong Kong are entitled to a minimum of 13 statutory holidays (to be progressively
increased to 17 by 2030) per year or public holidays (which consist of every Sunday, statutory
holidays, plus four extra public holidays). Employers may require employees to work on a
statutory/public holiday if an alternative or substituted day is granted in lieu.
All employees who are continuously employed (i.e., at least 18 hours per week for four consecutive
weeks) are entitled to one rest day in every seven-day period.
All employees who are continuously employed (see above) are entitled to be paid a statutory sickness
allowance. Under the Employment Ordinance, the employee accumulates a certain number of leave
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days per month of service up to a maximum allowance. Employers are prohibited from terminating
employees while they are absent from work and receiving paid sickness allowance.
Under the Employment Ordinance, an employee who has completed 12 months of continuous service
is entitled to seven days’ paid annual leave (up to a maximum of 14 days for nine years of service).
However, in practice, employers frequently agree to a contractual annual leave entitlement in excess
of the statutory minimum.
Maternity Protection and Benefits
Female employees who are employed under a continuous contract (see above) are entitled to 14
weeks of statutory maternity leave. The amount of maternity leave pay is calculated at four-fifths of
the employee’s daily average wage, although in practice many employers choose to make no
deduction as a benefit to the employee. The maternity leave pay for the additional four weeks is
subject to a cap of HK$80,000. The Hong Kong government will reimburse employers in respect to
the extended period of maternity leave. Once a pregnant employee has given notice of pregnancy, the
employer is prohibited from terminating her employment until the date of her return from maternity
leave. The definition of “miscarriage” under the Employment Ordinance has also been updated from
“before 28 weeks of pregnancy” to “before 24 weeks of pregnancy” to entitle a female employee,
whose child is incapable of survival after being born at or after 24 weeks of pregnancy, to maternity
leave if other conditions are met.
In addition to the protections under the Employment Ordinance, Hong Kong’s anti-discrimination
legislation prohibits discrimination against employees on the grounds of sex, race, pregnancy, and
family status.
Paternity Leave
Male employees are entitled to five days’ paid paternity leave for each child born on or after 18
January 2019. To qualify, the male employee must (i) have been employed under a continuous
contract for not less than 40 weeks immediately prior to the intended commencement of the leave, (ii)
have given the required notification of the intention to take leave to his employer, and (iii) provide
evidence that he is the father of the child. Paternity leave can be taken separately or consecutively,
but it must be taken within the period of four weeks prior to the expected date of delivery and 14
weeks following the birth of the child.
Discretionary Benefits (Bonuses)
It is common for employers in Hong Kong to pay employees an end-of-year payment. It is sometimes
referred to as “double pay,” “13th month bonus,” or “end-of-year payment” and is usually paid prior to
the Chinese New Year holiday. The amount is typically equal to a full month’s wages.
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TERMINATION OF EMPLOYMENT
I. GROUNDS
Termination can be brought about by mutual agreement, upon expiry of a fixed-term contract,
termination by the employer with or without notice, or termination (or resignation) by the employee.
There is no concept of “unfair dismissal” in Hong Kong. The contract may also come to an end by
operation of the law (e.g., in the case of frustration, death, dissolution, or winding up of the business).
II. MINIMUM ENTITLEMENTS
Payments and Notice
The length of notice required to terminate a contract will depend on the type of contract involved.
Where the contract is deemed to renew from month to month but does not specify the length of notice,
the notice period is not less than one month. Where the contract specifies a notice period, then the
length of notice will be the agreed period, but it cannot be less than seven days.
Both the employer and employee may terminate the employment by making payment in lieu of notice.
It is also permissible to have a combination of part notice and part payment.
In the case of serious misconduct, disobedience, or incompetence warranting summary dismissal, the
employer may terminate the contract immediately without notice to the employee.
The following payments may be payable to the employee upon termination:
• Payment in lieu of notice.
• Accrued wages.
• Accrued annual leave.
• Outstanding holiday pay.
• Accrued end-of-year payment (and pro rata portion).
• Severance pay, if applicable.
• Long service pay, if applicable.
• Any other contractual entitlements.
Employers are required to pay the employee’s final entitlement as soon as practicable, but not later
than seven days after the date of termination.
III. REDUNDANCY
Genuine Redundancy
Eligible employees who have been made redundant or subjected to a layoff are entitled to a statutory
severance payment. To be eligible, the employee must have been employed under a continuous
contract for not less than two years.
Consultation
Not applicable in Hong Kong.
Payment
The payment is calculated on the basis of either two-thirds of the employee’s monthly average wage
or HK$15,000, whichever is the lesser, for each year of service (pro rata for an incomplete year). The
amount is subject to a maximum cap of HK$390,000.
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IV. REMEDIES
Dismissal Action
Constructive Dismissal
A constructive dismissal occurs when an employer has acted or engaged in conduct that amounts to a
significant breach of the employment contract or shows that the employer no longer intends to be
bound by the contract. In such situations, the employer is said to have repudiated the contract. The
employee ceases to have any further obligations under the contract (including any post-employment
restraints) and is entitled to leave the employment with or without notice.
As noted above, there is no concept of unfair dismissal in Hong Kong. However, the employee may
be able to bring a claim against the employer on the basis of breach of the implied duties of good
faith, mutual trust, and confidence.
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BUSINESS TRANSFER AND
RESTRUCTURING
I. LEGAL REQUIREMENTS
Transfer of Business
There is no law providing for an automatic transfer of the employment relationship upon a transfer of
business. The employment relationship with the former employer must be lawfully terminated and a
new contract entered into with the new employer. An employer may avoid the obligation to make
severance payments if it reemploys or reengages an employee on equal terms or the employee
unreasonably refuses the offer.
II. RESTRUCTURING
Notification
There is no requirement of notification in Hong Kong unless the restructuring involves the termination
of employees. Notification to employees must be made in accordance with the terms of their
employment contracts.
Consultation
Not applicable in Hong Kong.
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PROTECTION OF ASSETS
I. CONFIDENTIAL INFORMATION
Most contracts of employment include provisions protecting the confidentiality of an employer’s
confidential information, including intellectual property, clients, and the business’ employees.
II. CONTRACTUAL RESTRAINTS AND NON-COMPETES
Confidentiality provisions restrict employees from using confidential information for anything other
than their work duties. These provisions restrain employees from using confidential information during
and for a reasonable period of time after termination of employment.
Most executive employment contracts contain non-compete provisions that protect an employer’s
legitimate business interests, which can be enforced if reasonable under the circumstances. These
provisions usually prevent an employee from competing with his or her former employer for a period
of up to 12 months.
III. PRIVACY OBLIGATIONS
In Hong Kong, the collection and use of personal data is governed by the Personal Data (Privacy)
Ordinance. Personal data is information about a living person that would allow the individual to be
identified. This ordinance sets out requirements relating to the collection, use, storage, and handling
of personal data.
IV. WORKPLACE SURVEILLANCE
Under Hong Kong law, there is no general prohibition against an employer undertaking surveillance of
its employees. The Monitoring Guidelines issued by the Privacy Commissioner set out various factors
for employers to consider when assessing the appropriateness of implementing employee monitoring
and its potential impact on the collection of personal data and privacy issues.
V. WORKPLACE INVESTIGATIONS
Employers use workplace investigations as a management and conflict-resolution tool to determine
policy breaches, misconduct, or misuse of confidential information. The conduct of these
investigations is determined by policy.
Outcomes of workplace investigations are often used to manage employees or to determine whether
to terminate an employee’s employment.
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WORKPLACE BEHAVIOR
I. MANAGING PERFORMANCE AND CONDUCT
Employment contracts, policies, and agreements provide for management of employee performance
and conduct.
While the concept of unfair dismissal does not exist in Hong Kong, it is generally considered to be
good practice for an employer to warn an employee and document grounds for dismissal before
terminating for poor performance. This may help to protect the employer against claims made by
employees and to avoid payments, such as statutory severance.
II. BULLYING AND HARASSMENT
Bullying
There is no law against bullying in Hong Kong. However, an employee may be able to rely on
breaches of the relevant anti-discrimination ordinances or the common law duty of the employer to
provide a safe place and a safe system of work to the employee.
Harassment
Harassment is unwanted behavior that is aimed at offending, humiliating, or intimidating another
person. Harassment in employment for an unlawful reason, such as sexual harassment, is prohibited
under the Sex Discrimination Ordinance.
III. DISCRIMINATION
Hong Kong’s anti-discrimination legislation prohibits discrimination in the workplace and elsewhere
based on sex, race, disability, or marital status. The legislation comprises:
• The Sex Discrimination Ordinance
• The Race Discrimination Ordinance
• The Disability Discrimination Ordinance
• The Family Status Discrimination Ordinance
At present, the law does not prohibit discriminatory behavior based on age, religion, or sexual
preference.
IV. UNIONS
Representation
Individuals in Hong Kong have the right and freedom to form and join trade unions. However, the level
of participation is relatively low compared to many other jurisdictions. These rights are set out in Hong
Kong’s Basic Law.
The Employment Ordinance also provides protection against anti-union discrimination. Other relevant
legislation includes the Trade Unions Ordinance, the Trade Union Registration Regulations, and the
Labor Relations Ordinance. Employers should also be familiar with the Code of Labor Relations
Practice issued by the Labor Department.
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Right of Entry
No person is permitted to be a member of a registered trade union unless they ordinarily reside in
Hong Kong and are engaged or employed in a trade, industry, or occupation with which the trade
union is directly concerned.
The trade union is not allowed to refuse membership on the basis that an individual is only casually or
seasonally engaged or employed in the trade, industry, or occupation.
Industrial Disputation
A union officer has a right of audience before an arbitration tribunal between an employee and
employer.
V. REMOTE/HYBRID WORK
Work From Home
Employees do not have a statutory right to work from home, unless such right is provided for in the
employment contract. The employer and the employee are free to agree on the arrangement and
policies applicable to any work-from-home arrangement.
Employers are required to take out an insurance policy to cover employers’ liabilities for an
employee’s death or injuries from work under the Employees Compensation Ordinance, and
employers shall ensure the coverage of such policy extends to the remote working arrangement.
Employees will access the employer’s data through their own network and devices during the work-
from-home arrangement. Employers should adopt appropriate measures to maintain data security,
especially where personal data is involved, to safeguard against any data loss or unauthorized
disclosure.
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