Hong Kong 4-18 Continuous Contract Rule: How It Unlocks Statutory Entitlements
Learn how the 4-18 continuous contract rule works in Hong Kong and which statutory entitlements it unlocks for employees.
Hong Kong 4-18 Continuous Contract Rule Explained
The hong kong 4-18 continuous contract rule is the threshold provision in the Employment Ordinance (Cap. 57) that determines whether an employee qualifies for most statutory employment protections. An employee employed continuously by the same employer for four weeks or more, working at least 18 hours in each of those weeks, is deemed to be under a continuous contract.
That status unlocks rest days, paid annual leave, sickness allowance, severance payment and long service payment. The rule applies to full-time, part-time and casual employees whose working pattern meets the weekly hour and duration criteria.
4-18 Rule Hong Kong Explained
The 4-18 rule is the practical test the Labour Department and the courts apply. It has two limbs.
- Duration: the employee must have been employed for four consecutive weeks.
- Hours: in each of those four weeks, the employee must have worked at least 18 hours.
Break either limb and the employee is not under a continuous contract for that period. An employee who works 20 hours in week one, 15 hours in week two, 20 hours in week three and 20 hours in week four breaks the chain in week two. The four-week clock resets. The employee must then work four consecutive weeks with at least 18 hours in each before continuous contract status is established.
The rule is set out in section 5 of the Employment Ordinance (Cap. 57). The Labour Department publishes "A Concise Guide to the Employment Ordinance", which explains the calculation method with worked examples.
Continuous Contract Hong Kong Entitlements
Once an employee is under a continuous contract, the following statutory entitlements under the Employment Ordinance (Cap. 57) become available:
| Entitlement | Key requirement under a continuous contract |
|---|---|
| Rest day | One rest day in every seven-day period |
| Statutory holiday | 12 statutory holidays per year |
| Paid annual leave | 7 days in the first year, increasing by one day per year up to 14 |
| Sickness allowance | Paid at 80% of normal wages, subject to accumulation of paid sickness days |
| Severance payment | Payable on redundancy after 24 months of continuous service |
| Long service payment | Payable on termination after five years of continuous service (certain conditions apply) |
Employees not under a continuous contract are entitled only to statutory holiday pay and certain wage protections. Rest days, annual leave, sickness allowance, severance and long service payment do not apply.
Hong Kong Continuous Contract Definition
The legal definition sits in section 5 of the Employment Ordinance (Cap. 57). An employee is deemed to be employed under a continuous contract if the employee has been employed by the same employer for four weeks or more, working at least 18 hours in each week. The definition is exhaustive. There is no alternative test based on the nature of the work or the label the employer gives to the arrangement.
The Labour Department has confirmed that the definition applies regardless of whether the employee is described as a part-time employee, casual employee or temporary worker. The only question is whether the factual pattern of hours and weeks meets the statutory threshold.
How the 4-18 Rule Applies in Practice
Track each employee's weekly hours from the start of employment. The four-week period is measured from the first day of employment. If the employee works at least 18 hours in each of the first four weeks, the continuous contract begins on the first day of that four-week period. If the employee fails to meet the 18-hour threshold in any one of those weeks, the continuous contract does not start until a fresh four-week period with 18 hours in each week is completed.
Example: A part-time employee works 20 hours in week one, 22 hours in week two, 19 hours in week three and 17 hours in week four. Week four falls below 18 hours. The employee is not under a continuous contract. If the employee then works 20 hours in week five, 21 hours in week six, 20 hours in week seven and 19 hours in week eight, the continuous contract begins at the start of week five.
Entitlements That Depend on Continuous Contract Status
The following entitlements under the Employment Ordinance (Cap. 57) are available only to employees under a continuous contract:
- Rest day: one rest day in every seven-day period, as provided in section 18 of the Ordinance.
- Statutory holiday: 12 statutory holidays per year under section 39.
- Paid annual leave: a minimum of seven days in the first year of employment, increasing annually up to 14 days, under section 41.
- Sickness allowance: paid at 80% of normal wages, subject to the employee having accumulated sufficient paid sickness days, under section 33.
- Severance payment: payable when an employee with at least 24 months of continuous service is made redundant, under section 31.
- Long service payment: payable when an employee with at least five years of continuous service is dismissed for reasons other than redundancy or summary dismissal, under section 31.
Employees who are not under a continuous contract are entitled only to statutory holiday pay and the general wage protections in the Ordinance, such as the prohibition on unlawful wage deductions.
Borderline Cases and Common Misunderstandings
A casual employee who works irregular hours can be under a continuous contract. If the casual employee works at least 18 hours in each of four consecutive weeks, the continuous contract applies for that period. The contract may end and restart if the pattern breaks.
Probation periods do not affect continuous contract status. An employee on probation who meets the 4-18 test is under a continuous contract from the start of employment. The employee is entitled to rest days and statutory holidays from the first day of the continuous contract, even during probation.
Monitor part-time employees' weekly hours carefully. A part-time employee who regularly works 18 hours or more per week will be under a continuous contract and entitled to the full range of statutory benefits, including paid annual leave and sickness allowance.
Labour Department Guidance
The Labour Department provides "A Concise Guide to the Employment Ordinance" free on its website at labour.gov.hk. It contains worked examples of the continuous contract definition. Employers and employees can also contact the Labour Department's enquiry service for advice on specific cases.
The Labour Department has also issued a "Guide on the Employment Ordinance for Part-time Employees", which explains how the 4-18 rule applies to part-time and casual workers. Both guides are updated regularly and reflect the current interpretation of the law by the Labour Tribunal.
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