Employment Laws in Hong Kong
The employment ordinance governs everything related to employment in Hong Kong. An employer in Hong Kong is expected to adhere to the ordinance protection and ensure the standards of the Ordinance requirements are met. However, if the employee is not covered by the employment ordinance, then the terms of the contract would depend on both sides and should be signed by both parties.
The ordinance covers contracts that are signed temporarily, part-time, and contractual employees. However, an employee covered under the contract for employment outside Hong Kong is not eligible for protection under the Employment Ordinance.
Hiring Foreign Employees
Should there any employment opportunities in the market, the government of Hong Kong encourages employers to put locals as their first preference. However, foreigners with exceptional skills, knowledge, and experience still stand a chance to secure employment opportunities in Hong Kong.
Foreign professionals are categorized into two groups: the skilled, and the semi-skilled. The latter is eligible for a one-year non-renewable contract while the former can have their visas renewed annually.
If you are a company that is looking forward to hiring a foreigner, then you must apply for a visa on their behalf before they can start working in Hong Kong.
What is the employment age in Hong Kong?
Whether you are planning to hire a foreigner or a Hong Kong citizen, it is essential to note that an employer is not permitted to employ anyone who is below 18 years old in Hong Kong. However, persons who are aged between 13 and 17 years may secure employment opportunities under certain work conditions.
There is no mandatory retirement age in Hong Kong.
What are the guidelines for recruitment?
Hong Kong’s workforce constitutes individuals from different backgrounds. The Hong Kong Employment Law does not entertain any discrimination based on gender, ethnicity, or age. The Labor Department issues employers with guidelines to prevent any discrimination within the workplace. Further, the government of Hong Kong has specifically laid down selection criteria that should be followed during the recruitment, training, promotion, dismissal, or transfer of an employee.
The labor laws expect employers not to show any discriminative acts to the employee. Promotions should be based on an employee’s performance. An employer is further expected to ensure compliance with the employment rules when offering any employment contract in Hong Kong. The recruitment staff should be trained to be law-abiding and to avoid any discriminatory practices.
Mandatory Provident Fund
It is a requirement that all employees contribute 5% of their monthly income to the provident fund. However, the following persons are exempted from the MPF deductions:
- Foreigners who have been hired to work in Hong for a period not exceeding 12 months.
- Foreign workers who have been covered by the statutory pensions.
- Employees who are earning less than HK$ 7,000.
Taxation in Hong Kong
The taxation rate in Hong ranges from 2-17% depending on the gross income or a flat 15% on all the income after the deductions are made. The corporate tax rate in Hong Kong at 16.5%. Before hiring a foreigner, you should know that all expats who work in Hong Kong for more than 13 months are expected to contribute to social security unless they continue with similar deductions in their home country.
Risks of hiring a foreigner in Hong Kong
Employing a foreigner in Hong Kong can be overwhelming due to non-compliance risks. Being that all the risks that are involved in the process of hiring employees are on your company and you, it thus requires you to be extra careful when navigating the hiring process in Hong Kong. The consequences that accompany the non-compliance to the laws of Hong Kong hiring requirements are far beyond merely investing your time and money to have accurate information to enable you to hire under the Hong Kong laws and procedures. It is advisable to hire a professional consulting company to enable you to handle all the employment requirements and procedures for your company. Paul Hype Page will guarantee you the best services when it comes to hiring non-Hong Kong employees as you concentrate on making your business operations.
The cost to hire a foreigner in Hong Kong
There are certain costs that you are likely to incur when hiring a foreigner in Hong Kong. Some costs might be hidden, and you may likely fail to factor in certain costs involved while estimating the entire budget. Some of these costs that an individual is likely to fail to notice are country specific. The country where an employee is coming from is essential to the employers as specific states have varying hiring rules and procedures that are likely to cost the potential employer more than they expected. However, outsourcing employees are still preferred despite the challenges involved because services outsourced are good for global mobility.
What are the human resources issues you are likely to encounter in Hong Kong?
Any employee on an assignment in Hong Kong, irrespective of their country, is subject to the Hong Kong termination laws. Taking, for instance, the notice period for termination can either be on as defined by the contract of the hiring team but shouldn’t be less than 7 days. However, if the contract does not specify that, then the period for notice is a minimum of one month. The severance payment is only required if the employment exceeds two years, and the termination is involuntary.
The sick leave pay in Hong Kong is generous and may take up to 24 days in the first year and 48 days in the second year after the two parties sign the employment contract. The unused sick leave can be up to a maximum of 120 days. The payment for sick leave is deducted by 20% of the total daily salary.
Work Permits and Visas
If you are an employer who is planning on hiring a non-Hong Kong worker, then you should know that all assignees to Hong Kong will require a work permit. Besides, the process of obtaining the work permit will take from four to eight weeks for one to get the final work visa. The other vital point to note is that only legally married spouses can accompany an employee with a work permit to Hong Kong. However, life partners cannot qualify to accompany the assignee.
The Hong Kong taxation law does not work on the PAYE system, but the employee is expected to calculate their taxes annually and remit them. The amounts are not withheld directly from the employees’ paycheck.
How to Hire Foreigners in Hong Kong? FAQs
The processing time for a work visa normally takes around 2-3 months.
A year. The visa can be renewed when it is expired.
A company can process Employment for Professionals application as many times as they needed for foreign workers. No quota system is being applied for work visas under this scheme.
Expats with educational qualifications and work expertise can work in Hong Kong with a work permit calls Employment for Professionals.
The process of obtaining a self-employment visa in Hong Kong is the same as that of a business visa. They should cost no more than 250 HKD which is approximately 33USD.