The Gig Economy of Hong Kong

Hong Kong has been cited as the third most difficult place to find skilled employees in the world. As Asia Pacific continues to face record talent shortages, Hong Kong is expected to see a talent deficit toppling around 47 million by 2030. Despite all these, a gig economy is a boom as almost nine in ten people increasingly demand more choice and flexibility in how they work. The other percentage acknowledges that they will be influenced by family commitments, hobbies, or education towards adopting the gig economy. The gig work attracts a vast range of people across different industries, ages, and experience levels who are ready to re-shape the interactions between workers, businesses, and customers.

Key Industries Where Gig Economy Workers Are Currently Employed

The gig economy workforce comes in the form of part-time workers, freelancers, project workers, software developers, accountants/financial advisors, lawyers, specialists, independent contractors, and full-time devotees who rely on on-demand jobs as their main source of income. Sectors like financial services, banking, construction, real property, trade and manufacturing, supply chain, accounting, sales & marketing, transportation, food & beverages, the music industry, and healthcare are where most of the gig economy workers are currently employed.

For the last six years, Hong Kong has seen a 40% rise in the population of the gig economy workforce. This increase has encouraged employers to improve diversity in their workforce strategies.

Some choose freelancers not because of the autonomy and control it provides, but as a stepping stone to a better job. Others do it for extra monies and others as the only available option.

Example of a gig company/organization in Hong Kong

Deliveroo. Deliveroo has put in place appropriate measures to protect workers, businesses, and the public. It has done this by offering free Red Cross first aid courses to riders and launching a free accident, and third-party liability insurance package giving riders in Hong Kong and worldwide accident and injury cove and allowing them to claim lost income are unable to ride because of an on-the-job injury.

Other examples are Uber, a car-hailing company that drives you to your door, Couch Surfing or Airbnb, which helps you have an enjoyable trip at a lower cost, and TaskRabbit which enables you to do outdoor chores. We also have Upwork and UpCounsel in the professional sector offering design services and legal solutions, respectively.

What contributes to the growth of a gig economy?

It is often thought that technology has a single hand in the thriving gig economy, but this is not always the case. It is society. Society can choose to champion the importance of entrepreneurship, risk, and independence, leading to a smaller state and lower taxes. Growth is more closely related to policy decisions and social choice, and not the inevitable result of technological progress.

In as much as technologies can be exploited to accomplish a gig economy-related task, technologies can be utilized to fuel social inequalities making work less permanent and the livelihood of workers more tenuous. But those same technologies can be used to improve the wages and welfare of workers. Eventually, how technology is used and the kinds of employment relations it creates are social, not technical choices.

Hong Kong’s Gig Economy Amidst Corona Virus Pandemics

The coronavirus pandemic has battered the gig economy, and the government has been urged to give gig economy workers support through these challenging times. The epidemic has caused jobs to dry up. This is because of the banning of gatherings and ceremonies/services like weddings, schools, and holiday functions.

In March 2020, a survey of musicians by the Hong Kong Music Industry Union found that 294 out of 500 respondents had their performances canceled, with two in five having sustained a loss of income.

The government’s latest HK$137.5 billion relief package set to take-off in June will see to it that self-employed people get a one-off subsidy of HK$7,500 provided they have a Mandatory Provident Fund (MPF) account like other workers

The gig economy and the corporate world

There is a rapid and radical change in the corporate labor force than ever before 2015. Very short-term contracts, flexible hours, and contingent freelance workers are increasingly being adopted. These changes taken together with smart machines, drones, and robotics are changing the workforce, and more people are, in turn, concurrently holding multiple jobs.

Unfortunately, Hong Kong’s labor law, like with the rest of the world, seems more rigid on the current job and work structure. The labor law does not take into consideration the fact that most organizations are considering short-term workers and freelancers. Such workers are subjected to closer review from law enforcement agencies and government when they shift from one position or work to another.

If you are looking forward to working with larger companies then you should incorporate your company since the giant institutions prefer working with corporate entities to individual freelancers. Besides, incorporation will help you propel your brand to a higher level of professionalism. We, at Paul Hype Page, have experience in incorporating companies and we will help you with the process as well as the process of filing your tax returns in accordance with the IRD requirement.

Further, incorporating your company will benefit you when filing taxes and still Paul Hype Page consultation services will aid you to file all your taxes to ensure smooth business operations in Hong Kong.

Legal Issues and Pitfalls of Engaging Contingent on-Demand Workers in Hong Kong

• Independent contractor and misclassified employees
  To differentiate an independent contractor and a long-term employee in Hong Kong, you must examine every attribute of the parties’ relation, like how much control the organization can exert on the employee, to what extent an individual is integrated into the company, whether the company is obligated to provide work to the employee, and whether the employee is running his personal business and whether the employee is managing his own schedule and financial risks.
  For example, a Hong Kong labor court might dismiss “an independent contractor” if the relationship between the company and the worker is one of that exists on the employment contract.
  If an employer misclassifies an on-demand worker as an independent contractor instead of a staff ,it may lead to disputes over MPF contributions, vacation pay, severance pay, and employees’ compensation. A company might face criminal conviction or criminal penalty
• Record-keeping
  According to the Minimum Wage Ordinance of Hong Kong, the statutory rate of the minimum wage is HDK 37.50 per hour. Many companies find it challenging to keep track of hours and days casual workers have accumulated to comply with the minimum wage requirements. In Hong Kong, any casual workers who have worked 18 hours or over per week for a month are considered continuously employed by law. They will be entitled to at the minimum of 1 day off every week or paid statutory holidays and paid vacations. However, it is awfully hard to track how many hours these casual workers have worked each week in reality.
• Contract drafting & holiday pay issues
  On many occasions, employers assume that the remuneration of contingent on-demand workers covers holiday pay. However, in Hong Kong, it is a criminal offense chargeable in the courts of law if an employer fails to pay an employee their due statutory holiday pay.

The Setbacks of the Gig Economy in Hong Kong

There is a higher risk of unemployment, lower employment income, and more inferior labor benefits and protection.

The Future of the Hong Kong Gig Economy

Large corporations have agreed that a blended workforce facilitate them become more agile, quickly meet changing market and consumer demands, and in so doing, they better manage their finances. These companies in critical industries contribute significantly to the national Gross Domestic Product (GDP).

Regulatory agencies are also working to ensure that there exist equal employment rights and protection. This economy is set to continue growing and may soon become the new workforce dynamic. The future is wide open, and there is no doubt that Hong Kong can be at the forefront of the world’s gig economy.