• Employment Act Hiring Procedures in Hong Kong

The other essential step after successful incorporation of the business is finding the right and qualified employees that will help you execute your company operations. The hiring process might be tiring and exhausting especially if you are not conversant with the Hong Kong labor laws. Therefore, it is vital to first learn the legal requirements, workers’ rights, and types of contracts available in Hong Kong, including employer-employee relations to help you with the hiring process.

The principal statute that governs the work relations in Hong Kong is known as the Employment Ordinance. Most benefits and protections that are available under the Employment Ordinance covers only continuous employees. An employee is considered as a continuous employee if they have worked for the same employer for a period that is not less than four consecutive weeks with a minimum of 18 hours each week.

What are the recruitment regulations and procedures in Hong Kong?

Hong Kong offers an equal employment opportunity to its citizens that consider hiring based on experience, expertise, and the ability to perform the job. The Labor Department of Hong Kong is actively involved in helping Hong Kong employees to avoid discriminations that might result from gender biases, age, race, religion, marital status, or disability.

The employment age in Hong Kong is 18 years. However, younger persons who are between 13-17 years old may be hired through the restrictions on what they can do and the number of hours that they can work applies. On the other hand, there is no legal age to retire in Hong Kong. However, the employees can retire between the ages of 60-65 years.

Students who are either Hong Kong citizens or permanent residents can also be hired to work in Hong Kong either on a full-time or part-time basis. While students are entitled to MPF contributions, interns are only paid monthly salaries.

Equally, the international students who are full-time and locally accredited in Hong Kong studying at a degree level and whose study period is not less than one academic year are entitled to internship programs under certain conditions. Besides, the internship must be related to the field of study and endorsed by the educational host institution.

The hiring of foreign employees

According to the Hong Kong employment act, employers are advised to prioritize hiring a local workforce. However, foreigners who possess unique skills and expertise that is not readily available in Hong Kong can be hired. However, for a foreigner to be permitted to work in Hong Kong, they need to have a valid work visa. Further, employers are advised to apply for work visas on behalf of their employees. Once the visa application is approved, the employee may immediately commence working legally in Hong Kong.

The employment contracts

The employment contract in Hong Kong can either be in an open term, also known as permanent, or in a fixed term. If the contract period is not defined in the contract then it will be automatically deemed to be one month. Renewable monthly once the employee works for at least 4 weeks and 18 hours per week.

It is not a requirement that all the contracts be in writing although most are put in writing. The official languages in Hong Kong are Chinese and English. Besides, there are no restrictions on the use of probationary periods when writing employment contracts. However, they mostly range from three to six months. During the first month of probation, either of the parties can terminate the contract and the employer is not obliged to issue a notice of termination within the period.

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Wages

Wages are compensation that is made to the employee by an employee corresponding to the work done, earnings, allowances, tips, plus any other chargeable service. Such might include; commissions, all allowances, overtime pay, commission, among others. However, the wage payment does not include;

  1. Expenses spent on accommodation, education, food, fuel, water, light, or any other medical expenses that are provided by the employer.
  2. Contributions towards any retirement scheme.
  3. Any compensation made to an employee because of any expenses they incurred by nature of employment.
  4. End of year payment that is made as gratitude or amount that is only payable at the discretion of the employer.
  5. Gratuity is rewarded to an employee at the termination of the employment contract.

However, if an employee is entitled to the end of year payment, maternity pay, sick leave payment, severance pay, holiday pay, annual leave pays, among other payment entitled, then they will be treated as wages according to the above definition.

The payment of wages is due on the expiry date of the last day of the wage period or as defined by the contract. It is thus a good practice that an employer pays wages to the employees as soon as practicable but in case of any failures, the wages should not go beyond seven days from the time that the wages are due.

In case an employer willfully and without any reasonable excuse fails to make payments to their employees as stipulated is liable to prosecution and upon conviction is charged a fine of $350,000 and three-year term imprisonment. Further, if such failures result from the corporate body that includes the company secretary, director, manager, or any other officer within the company then they become liable to the same penalty.

On the other hand, if an employer, without giving a convincing reason, fails to pay for the interests on the outstanding wages will be prosecuted and might, upon conviction, pay a fine of $10,000.

If an employer can no longer afford to make payments to their employee then they should terminate the contract of employment in accordance with its terms.

What can I deduct from wages?

The following can be deducted from the employee’s wages according to the Employment Ordinance in Hong Kong;

  • Days absent; the days an employee misses to go to work may be deducted from their wages. However, such deductions should not exceed the wages payable for the period of absence.
  • Damages or loss of goods; if an employee through their negligence damages or loses equipment or an employer’s property, then such might be deducted from their earnings.
  • If an agreement made between the two contracting parties to supply food and make the deductions thereafter. Then such are liable for deductions.
  • Accommodation is provided to the employees’ families.
  • Recovery of a loan made by the employer to the employee although the employee must write and sign a consent on the same.

Minimum wages

Statutory Minimum Wage (SMW) in Hong Kong applies to all the employees in Hong Kong. The exemptions include;

  • Live-in domestic workers
  • Some seafarers
  • Students under the internship programs
  • Registered apprentices

The SMW rate is usually set at an hourly rate and it is currently set at HKD37.5 as of 2019. The figure is however reviewed up words after every two years by the Hong Kong government.

Rest days, Holidays, and Leave

The Employment Ordinance in Hong Kong requires that an employee enjoys rest days including statutory holidays and paid annual leave during the employment period.

An employee who is employed under a continuous contract is entitled to not less than one rest day within a seven-day work period. A rest day, according to the Hong Kong labor law is defined as a continuous period that is not less than 24 hours that an employee is exempted from executing the employers’ activities. As defined by the law or otherwise the contract, the leaves, and rest days are payable.

Tax requirements for employers

All the employers or potential employers in Hong Kong are expected to prepare and report all their wages to the income tax ordinance. If an employee is set to leave Hong Kong then the employer should inform the Inland Revenue Department (IRD) with at least one month’s notice. The purpose of the notification is to ascertain that the employee leaves the country after paying all their obligations as required by the IRD. This applies only to those employees who intend to quit their Hong Kong work or relocate abroad.

Mandatory Provident Fund (MPF) Scheme

All the Hong Kong employees who are between the ages of 18-65 are expected to contribute towards the MPF irrespective of whether they are full-time or part-time workers or even casual laborers. However, the following are exempted from contributing to the MPF;

  • Self-employed hawkers
  • Domestic workers
  • Those who are already benefiting from pensions
  • Employees of the European Union Office and European Commission who are situated in Hong Kong.
Employment Pass

Hong Kong Employment Act: Hiring Procedures in Hong Kong FAQs

How is the selection or shortlisting done when employing?2021-02-18T05:07:20+00:00

The employment act of Hong Kong requires employers to give equal opportunities and only shortlist those who have the qualifications and expertise they are seeking without any discrimination whatsoever.

How do I resolve an employment dispute in Hong Kong?2021-02-18T05:07:27+00:00

The labor law of Hong Kong has a special labor tribunal that has exclusive jurisdiction on certain labor issues that include disputes relating to the Employment Ordinance. The parties are not entitled to legal representations during the hearing.

Under what circumstances does the Hong Kong employment act permit dismissal of an employee?2021-02-18T05:07:33+00:00

An employee’s contract can be terminated if;

  • They portray gross misconduct in the company
  • They prove incompetent
  • They do not prove the necessary or required skills for their duties.
Does the Hong Kong Employment Act permit the employment of foreigners in Hong Kong?2021-02-18T05:07:40+00:00

Yes, an employer can hire foreign workers who have exceptional skills and expertise that is rare among the Hong Kong task force.

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