- Overview: Hong Kong
- Global HR Compliance
- Global PEO and payroll
- Work permit for hiring expats via PEO
- Expand without a company set up
- Contractor vs. employee: which is better?
Global HR Compliance in Hong Kong
If you hire an international workforce, or plan to hire, then Hiring and Firing Workforce in Hong Kong Guide below will help you understand the nuances of labor legislation in the country.
When the company is planning to enter a new foreign market of Hong Kong and has a need to employ a local national there, the first question to answer is how it is going to make local hires.
We have designed a Global Employer of Record service to help you outsource global employment of your foreign workforce to companies like ours.
This solution helps you employ your global sales force in Hong Kong as well as in other 180+ countries of the world, and provide pay and benefits to your employees, as well as administer any business expenses with our help.
Our solution is different from other hiring modes in that it helps you engage your foreign workforce in full compliance with the local labor legislation. This means you are protected from any non-compliance and employee misclassification risks while we bear all employment risks, not you.
So, it looks very much like hiring your in-house sales force in your home country. However, you focus on only on your global business development while we admin your global HR. In addition, you don’t need to open your own entities in the foreign countries and can leverage our infrastructure in Hong Kong instead. With our service, you can become a global company with reduced costs and minimized time and effort on your end.
Your employed foreign sales force will devote 100% of their time to your company product and may stay with you longer than foreign independent sales reps.
Global Employer of Record solution is 100% compliant solution that guarantees you and your employees fully compliance with local legislation in Hong Kong .
We are experts in global workforce employment in Hong Kong, and our goal is to become your single provider. Instead of working with numerous local staffing agencies and legal advisors, Acumen International can solve your global business challenges and save you time, costs, and resources.
Our team of English-speaking professionals frees you from working through language nuances. Acumen International works 24/7 and can assist you whenever you need, regardless of time zones. Our goal is to create tailored labor solutions for you that are managed legally and in full compliance with the local employment laws.
With our knowledge and deep understanding of local nuances, you easily satisfy your need for skilled professionals in your global industry. With our qualified local partners, you can trust that your global workforce satisfies all local tax, social security, and immigration requirements in Hong Kong.
Hiring and Firing Workforce in Hong Kong Guide
# Employment Contracts
Contract of employment are regulated by the Employment Ordinance of Hong Kong, and can be drawn in writing or made verbally. Employment contract can be express or implied. As an express contract, an employer is required to clearly state the employee’s compensation package, time of payment, and requirements for termination in the written contract. Implied terms of a contract are those not explicitly stated in the written contract but must be drawn from the Employment Ordinance. An employer’s violation of a contract after it has been concluded is considered a serious offence in Hong Kong and therefore attracts a fine of $10,000.
# Minimum statutory employment rights
# Hours of work
The number of hours an adult employee can work is subject to negotiation between an employer and employee, before the start of an employment. The only statutory provision for working hours is with respect to employees between 15 and 17 years, who under the provision, are barred from working more than 8 hours in a workday or more than 6 workdays in a week. Under 15 teenagers are not legally allowed to work.
Out of 71 global cities listed in the “working hours” index of UBS’ annual “Prices and Earnings” study, Hong Kong came dead last by a pretty hefty margin, with an average of 50.11 hours spent at the workplace per week. Data were collected from 15 professions in business, construction, and education sectors, to name a few.
# Probation period
There are no express or implied provision about probation in the Employment Ordinance. Employers who wish to try their new employees before fully employing them usually give up to 3 months, however, it is not a standard. Conditions of probation period should be fixed in employment contract.
# Annual leave
Holiday benefits are given to employees who have no fewer than 3 months’ work experience with the company. Employees are entitled to time off in each of these 12 legal holidays: New Year’s Day; Lunar New Year’s Day; The second day of Lunar New Year; The third day of Lunar New Year; Ching Ming Festival; May 1; Tuen Ng Festival; Hong Kong Special Administrative Region Establishment Day; The day following the Chinese Mid-Autumn Festival; Chung Yeung Festival; National Day; and Chinese Winter Solstice Festival. Additionally, employees are entitled to recess on Sundays, Good Fridays, Saturdays following Good Friday, Easter Mondays, The Birthday of the Buddha, Christmas and first weekday following Christmas. Any of the listed holidays that fall on a legal rest day must be taken the next day succeeding rest day. Payments cannot be made in lieu of any of these holidays.
An employee who has continuously worked for an employee for over one year is eligible for 7 days’ paid leave after the 12th month of his/her employment, and a subsequent increase by a day after the 3rd year, by 2 days after the 4th year, by 3 days after the 5th year, by 4 days after the 6th years and so on until it gets to 14 days. Employers must notify the employees of the period of the annual leave 14 days before the due date, otherwise, the time will be open to negotiation.
# Parental leave
Pregnant employees who have worked a minimum of 40 weeks under continuous employment are entitled to 10 weeks of paid maternity leave. Employees with less than 40 weeks’ work experience in the same company are entitled to 10 weeks’ maternity leave with no benefit.
Maternity leave should be paid for a period of 10 weeks and it should be paid on the normal payday of the employee.
The daily rate of maternity leave pay is a sum equivalent to four-fifths of the average daily wages earned by an employee in the 12-month period preceding the first day of the maternity leave. If an employee is employed for less than 12 months, the calculation shall be based on the shorter period.
# Sick leave
Provision of sick leave entitlement is made in such a way that an employee can accumulate up to 120 days over the period of his/her employment. Employees who are within their first year of employment are given 2 days of paid sick leave for each completed month, while those who have served in the company for more than one year period are entitled to 4 days paid sick leave for each completed month of service.
The daily rate of sickness allowance is a sum equivalent to four-fifths of the average daily wages earned by an employee in the 12-month period preceding the sick leave. If an employee is employed for less than 12 months, the calculation shall be based on the shorter period.
There are no provisions for overtime in the Employment Ordinance.
# State minimum salary
Effective from May 2017, the state minimum wage in Hong Kong is 34.50 HKD (US$4.5) per hour.
# Employment termination
An employee has the right to terminate the employment relationship as much as the employer has. During the period of terminating an employment contract, either of the parties who initiates the idea is required to give the other party sufficient days of notice as agreed earlier in the contract. Cash payment can be made in place of the notice period. According to the Employment Ordinance of Hong Kong, the duration of a notice of termination should be as follows:
- During probation – can be based on agreement, but not less than 7 days;
- Within the 1st month of probation – none
- after the first month of probationary period – can be based on agreement, however must not be less than 7 days;
- after probation – can be based on agreement, but no fewer than 7 days. With the absent of prior agreement, the notice period must not be less than one month.
Employees whose contracts are terminated are entitled to an outstanding salary (if any), payment for any unused annual leave and for bonus, severance pay or long-service payment where applicable. Employees who are laid off are eligible for severance pay if they have worked at least 2 years in the company. In that case, they will be entitled to receive two-third of their monthly pay or HKD$15 000 (if it is less than the former) for each year of service up to HKD$390 000.
Acumen International can help you fast-track your possibilities of entering and expanding your business in Hong Kong by providing you with an Employer of Record services. Our unique mix of PEO/EOR solutions will enable you to jumpstart your global operations almost immediately, cost-effectively and compliantly without you having to set up a legal entity there.