Creating an Employee Handbook for Hong Kong: What to Include for Legal Compliance

Employee Handbook Hong Kong: Contents and Legal Requirements

An employee handbook consolidates workplace policies, rights and obligations. For employers, it is a practical tool to demonstrate compliance with the Employment Ordinance (Cap. 57) and reduce the risk of disputes.

Hong Kong Employee Handbook Contents

A comprehensive handbook covers the areas below. Each is grounded in a statutory requirement.

Employment status and the 4-18 rule. The Employment Ordinance defines a continuous contract. An employee who works for the same employer for four weeks or more, with at least 18 hours worked in each week, is under a continuous contract. That status unlocks most statutory entitlements: rest days, paid annual leave, sickness allowance, severance payment and long service payment. State plainly that part-time or casual staff who do not meet the 4-18 rule are not entitled to these benefits.

Probation period. State the length of probation, typically one to three months. Confirm that during probation either party may terminate with shorter notice than the statutory minimum. Confirm also that the employer may dismiss without notice or payment in lieu during the first month of continuous employment.

Rest days and statutory holidays. Employees under a continuous contract are entitled to one rest day per week of not less than 24 hours. Specify the designated rest day and the procedure for changing it. List the 12 statutory holidays under the Employment Ordinance and confirm that employees are entitled to an alternative holiday if a statutory holiday falls on a rest day.

Annual leave. After completing 12 months of continuous employment, an employee is entitled to paid annual leave. The entitlement increases from 7 days in the first year to a maximum of 14 days after 9 years. State the leave year, the method for calculating accrued leave, and the policy on leave scheduling.

Sickness allowance. An employee who has accumulated sufficient paid sickness days is entitled to sickness allowance at 80% of normal wages. The accumulation rate is two paid sickness days per month of continuous employment, up to a maximum of 120 days. Require the employee to produce a medical certificate issued by a registered medical practitioner for any sick leave exceeding one day.

End-of-year payment. If the contract provides for an end-of-year payment, often called a thirteenth month bonus, the handbook must specify the qualifying period, the calculation method, and the payment date. An end-of-year payment is not mandatory under the Employment Ordinance unless the contract expressly provides for it.

Employee Handbook Employment Ordinance Compliance

The handbook must accurately reflect the statutory requirements of the Employment Ordinance (Cap. 57).

Wage protection. State the wage period, the pay day, and the method of payment. Wages must be paid within seven days after the end of the wage period. List the only lawful deductions from wages: those authorised by the employee in writing, those required by law (such as MPF contributions), and those for overpayment or absence.

Termination procedures. Cover the notice period required for termination of a continuous contract. The statutory minimum is seven days during the first month of continuous employment, then one month for the first year, increasing thereafter. Explain payment in lieu of notice: the employer pays wages for the notice period instead of requiring the employee to work it.

Summary dismissal. State the grounds on which an employer may dismiss an employee without notice or payment in lieu. These include wilful disobedience, fraud, gross misconduct, and repeated neglect of duty. Warn that summary dismissal is a serious step and must be supported by evidence.

Severance payment and long service payment. Explain the eligibility criteria for each. Severance payment applies when an employee with at least 24 months of continuous service is made redundant or laid off. Long service payment applies when an employee with at least five years of continuous service is dismissed for reasons other than redundancy, misconduct, or resignation. The abolition of MPF offsetting from 1 May 2025 means employers may no longer use accrued benefits from mandatory MPF contributions to offset these payments for service on or after that date.

Employee Handbook for Hong Kong Companies

Beyond statutory compliance, the handbook should address company-specific policies that affect day-to-day operations.

MPF enrolment and contributions. Both employer and employee contribute 5% of the employee's relevant income, capped at monthly relevant income of HK$30,000. The maximum mandatory contribution is therefore HK$1,500 per side per month. The employer must enrol a new employee in an MPF scheme within 60 days of employment starting. For employees earning below HK$7,100 per month, the employer still contributes but the employee does not.

Employees' compensation insurance. Confirm that the company holds employees' compensation insurance under the Employees' Compensation Ordinance (Cap. 282). This insurance is compulsory for every employer, regardless of the number of employees or the length of employment. State the procedure for reporting a workplace injury and the benefits available.

Code of conduct. Set out expectations for behaviour, including anti-discrimination, harassment, and confidentiality policies. These are not statutory requirements under the Employment Ordinance. They are essential for managing workplace culture and reducing legal risk.

Leave policies. Detail the company's approach to annual leave, sick leave, and other leave types. Clarify that statutory entitlements are minimums. The company may offer more generous terms.

Employee Handbook Template Hong Kong

A template provides a starting point. It must be customised to reflect the company's specific policies and the latest legal requirements. The following structure is recommended:

1. Introduction. Purpose of the handbook, scope of application, and disclaimer that it does not form part of the employment contract.
2. Employment status. Continuous contract, probation period, and working hours.
3. Leave entitlements. Rest days, statutory holidays, annual leave, sickness allowance, and other leave.
4. Wages and benefits. Wage period, pay day, deductions, MPF contributions, and end-of-year payment.
5. Termination. Notice period, payment in lieu, summary dismissal, severance payment, and long service payment.
6. Insurance. Employees' compensation insurance and reporting procedures.
7. Code of conduct. Behaviour, confidentiality, and disciplinary procedures.
8. Acknowledgment. A signed acknowledgment form confirming the employee has received and understood the handbook.

The Labour Department provides guidance on the Employment Ordinance at labour.gov.hk. Review the handbook annually. Update it to reflect changes in legislation, such as the abolition of MPF offsetting or amendments to statutory holiday entitlements.