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Comprehensive Guide to Employment Laws and Obligations in Hong Kong

The People’s Republic of China administers a special region called Hong Kong along the eastern Pearl river delta in South China. Its strategic location in Asia lures global companies to expand their regional business operations. However, employers in Hong Kong often look out for legally compliant ways to tackle workforce management challenges. 

Any labor statute, including Hong Kong’s labor law, prescribes minimum standards of employee protection and workplace governance, in addition to best practices for recruitment and workplace monitoring of employees. 

Continue reading this employment law in Hong Kong guide to frame sickness & other paid leave schemes, extend statutory payroll benefits, offer salaries above minimum wage, fix permissible working hours and overtime compensation, and learn about legal rules for dismissal and employee privacy regulations. 

Applicability of the Act

The Employment Ordinance (EO) is the primary legislation for labor regulations in Hong Kong. However, the entitlement under EO is not an overriding Hong Kong labor law statute.

The labor act rules in Hong Kong mandate employers to extend entitlements under the EO (like paid leave schemes and termination with a mandatory notice period) to all employees who have worked at least 18 hours a week for four or more consecutive weeks. 

Whereas mandatory laws (for minimum wage protection, data privacy, social security benefits, labor disputes, anti-discrimination, etc.) govern Hong Kong’s employment rules, regardless of the contractual nature of employment. 

Independent contractors or freelancers are generally outside the statutory protection of Hong Kong’s labor law. 

Employment Contract

Employment contracts between employers and employees form the basis of employment relationships negotiating various working conditions, salary payments, and other benefits. 

Further, Hong Kong’s employment law allows employers to draft employment contracts in any language or simply conclude an oral contract. Employers may choose to draft any one of two types of employment contracts in Hong Kong:

  • Standard employment contract: Popularly known as a continuous employment contract, it is applicable for those employed for four weeks or more and working at least 18 hours every week. Here, the employers must mention the rules of applicability and negotiate entitlement of statutory benefits under the Employment Ordinance and other mandatory labor act rules in Hong Kong. 
  • Fixed-term employment contract: Employers may draft this type of employment contract for employing individuals for one month, and it is renewable. Here, employers must extend basic protection under Hong Kong’s labor regulations. 

However, Hong Kong’s labor laws under the EO shall prevail for any less favorable contractual terms.

Key Provisions of the Act

Here’s a detailed overview of the Employment Ordinance and other mandatory employment laws in Hong Kong guiding employers to hire local or international talent in legal and statutory compliance with national laws. 

Working hours 

  • In the absence of the Hong Kong working hours law, employers face no restrictions in fixing work hours for employees. 
  • Hong Kong labor law mandates employers to grant at least one rest day per week. 
  • Further, employers must limit daily working hours per Hong Kong labor law for individuals below 18 years old.
  • In most cases, employers fix working hours mutually decided with the consent of trade unions.
  • Additionally, employers may expect the government to develop working-hour guidelines for 11 sectors, including elderly care homes, hotels and tourism, cleaning services, catering, theater, property management, cement and concrete, warehouse and cargo transport, construction, printing, and retail. 

Overtime compensation

  • Employer’s obligation to pay overtime compensation becomes redundant without Hong Kong employment rules on permissible working hours. 

Minimum wage

  • Hong Kong’s labor act rules mandate employers to peg minimum payout over and above the national government’s statutory minimum wage every two years. 
  • The minimum monthly wage in Hong Kong will remain at HKD 37.50 (approx. USD 4.78) per hour until at least 30 April 2023. 

Holiday entitlements

  • Hong Kong employment law mandates employers grant all employees 12 statutory public holidays yearly, which will increase progressively to 17 statutory holidays by 2030. 
  • Employers can offer paid public holidays only to those employees protected under continuous employment contracts and employed for over three months. 
  • Statutory public holidays in Hong Kong include
    1. Christmas day and the day following 
    2. Lunar New Year
    3. Chinese Mid-Autumn Festival
    4. HKSAR Day (when Hong Kong celebrates the handover to Chinese sovereignty)
    5. Birthday of the Buddha and the following day
    6. Easter Monday
    7. Good Friday, and the day following 

Leave schemes


Maternity leave

  • Employers must provide up to 14 weeks of paid maternity leave in Hong Kong for foreigners and citizens.  
  • The labor act rules in Hong Kong oblige employers to pay 4/5ths of the employee’s daily average wages (over the preceding 12-month period) during the maternity leave.
    1. Statutory pay concerning the 11th to 14th weeks of maternity leave is capped at HK$80,000. 
  • Employers may pass on Hong Kong’s paid maternity leave benefits to employees with continuous service of over 40 weeks. 


Paternity leave

  • Employers must grant five days of paid paternity leave in Hong Kong and pay 4/5ths of the employee’s daily average wages (over the preceding 12-month period).   
  • However, employers may fix the terms of paternity leave for employees with less than 40 weeks of continuous service. 
  • There is no statutory provision for shared paternity leave in Hong Kong.  


Paid annual leave (vacation)

  • Hong Kong labor regulations prescribe employers to grant paid annual leave progressively: 

Employment period with the same employer

Number of paid annual leave (in days)

One to three years


Three years to four years


Four years to five years


Five years to six years


Six years to seven years


Seven years to eight years


Eight years to nine years


At least nine years


  • Hong Kong’s labor act rules stipulate employers peg each day of statutory leave over and above average daily wages. 
  • Employers must calculate the average daily wages over the preceding 12 months. 
  • Furthermore, Hong Kong’s employment law allows employers to adopt a common leave year to maintain a uniform clear time for all employees. 

Other leaves


Sick leave

  • The labor regulations in Hong Kong allow employees to accrue:
    1. The first year of employment: Two paid sick days per month 
    2. Second year onwards: Four paid sick days each month
  • Employers may allow employees to accumulate up to 120 days of maximum sickness allowance per Hong Kong’s labor law.
    1. Employers must pay 80% of their average daily wages for an absence of more than four consecutive days.
  • Employers may also extend unpaid sick leave to employees due to illness or injury caused other than a workplace accident. 


Special leave:

  • Employers may grant 2-10 days of paid leaves on extraordinary occasions like 
  • Marriage purposes leave: Ten days of paid leave
  • Birth of a child: Two days of paid leave
  • Bereavement leave: Three days of paid leave
  • Exam leave: Up to ten days of paid leave

Payroll tax & other obligations

  • The labor regulations in Hong Kong stipulate employers withhold and report employee income tax and deduct social security premiums on behalf of their employees. 
  • Personal income taxes in Hong Kong are progressively levied between 2-17% for resident employees (including eligible foreign nationals). 
  • Employers must make a fixed proportion of statutory contributions and deduct employee contributions from employee income towards premiums for the following social schemes: 

Social security scheme

Employer contributions

Employee contributions

Mandatory Provident Fund (MPF) for earnings between 7,000.00 HKD to 30,001.00 HKD



For earnings over 30,001.00 HKD

1,500.00 HKD

1,500.00 HKD

Dismissal Rules  

  • Hong Kong’s employment law for termination does not require employers 
  • To give a reason for dismissal.
  • To send a notice of termination in writing.
  • However, the employer must ensure the following before terminating the employment contract: 
  • Provide a written statement detailing the severance pay calculation, as applicable. 
  • Use Form IR56F or IR56G to notify the Inland Revenue Department about employee dismissal. 
  • Notify the Immigration Department of the dismissal if the employer sponsors the employee’s working visa.


Notice period

  • Hong Kong’s employment law allows employee termination only after an advance notice period of not less than seven days. 
  • In most cases, the default notice period before termination of the employment contract in Hong Kong is one month. 
  • Hong Kong’s labor law also allows employers to terminate a contract without a prior notice period only when
  • Dismissing employees who have intentionally committed wrongful acts, misconduct, or habitual negligence. 
  • Dismissing employees within the first month of probation.


Long service pay

  • The labor regulation in Hong Kong mandates employers to offer long service pay upon termination of employment with or without notice period. 
  • The statutory long service pay is applicable for those under a continuous employment contract and who have worked for more than five years. 
  • Hong Kong’s employment rules have capped the maximum entitlement at HK$390,000.


Severance pay

  • The labor act rules in Hong Kong mandate employers to offer severance upon dismissal due to redundancy. 
  • The statutory severance pay is applicable for those under a continuous employment contract and who worked for more than 24 months. 
  • The amount of severance pay is 2/3rds of the monthly average pay over the last 12 months, capped at HK$390,000. 

Data protection and employee privacy

Employers may follow the Personal Data (Privacy) Ordinance (PDPO) to guarantee mandatory employee data protection rights. Below are some important PDPO requirements:  

  • Employers must inform employees before the data collection and of its intended purpose.
  • Employers must not retain employee data beyond its intended purpose.
  • Employers must disclose the details of stored employee data within 40 days of receiving such a request from the employee. 
  • Employers must take necessary precautions against unauthorized or accidental access or leak of data. 


Companies that violate mandatory provisions under labor regulations in Hong Kong are liable for the following: 

  • Misclassification of the employee as an independent contractor may result in payments for entitlements under the Employment Ordinance or, otherwise, an additional penalty.  
  • Maximum fine of up to HKD 500,000 for violating safety and health conditions at the workplace. 
  • Imprisonment of three years or a fine of up to HKD 350,000 for wilfully defaulting on any order of the court or labor tribunal. 

Compliance Strategies for Employers

Here are the most recommended strategies for employers to comply with Hong Kong’s labor code while hiring and managing employees. 

Template-based employment documents:

  • Companies may draft employment documents in compliance with labor act rules in Hong Kong using standard templates. For example, framing offer letters, correcting contract terms, creating employment records, generating payslips, framing termination notices, etc.    

Hiring and managing through an in-house HR team:

  • A dedicated team of experts in Hong Kong labor regulations effectively handles recruitments, regular employee training and skill upgradation, and managing payroll obligations. 
  • An in-house HR manager can make decisions on management’s behalf to deal with organizational changes, employee grievance redressal, or oversee employee appraisals. 

Easy onboarding and global team management with a SaaS-based payroll platform: 

  • Contemporary companies are switching to SaaS-based payroll solutions for their global expansion.
    1. Such a solution can work as an Employer of Record (EOR) or Professional Employer Organization (PEO) in Hong Kong. 
  • They offer HR solutions like automated document drafting and payroll management services. 

How Can Multiplier Help?

Multiplier is an ideal SaaS-based payroll solution for global startups and enterprises to automate employment documents, draft multi-lingual contracts, manage payroll taxes, disburse salary payments on time, deduct statutory social contributions, and much more. We assist businesses in compliant global expansion in 150+ countries, including Hong Kong. Employers find onboarding and managing global teams easier with Multiplier’s EOR/PEO platform. Not just that but companies also stay compliant with Hong Kong’s labor laws while recruiting and terminating employees.

Frequently Asked Questions

Hong Kong’s employment rules recognize collective agreements and must be mutually acceptable. However, collective agreements are rarely practiced as trade union membership is relatively low in Hong Kong.

Hong Kong’s employment law allows employers to pay suitable compensation to end an employment relationship without a notice period per the Payment in Lieu of Notice Clause (PILON).

Hong Kong’s employment rules generally award IP rights to employers unless agreed upon otherwise in the employment contract.

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