Hong Kong Employment Ordinance Cap 57: Statutory Rights and Employer Duties Explained

Hong Kong Employment Ordinance Cap 57 Key Rights and Duties

The Hong Kong Employment Ordinance Cap 57 is the primary legislation governing the relationship between employers and employees in Hong Kong. Administered by the Labour Department, the ordinance establishes minimum standards for wages and leave. It sets rules for termination. It mandates workplace protections. It applies to every employee engaged under a contract of employment. Limited exceptions exist for family members living with the employer and persons covered by specific overseas laws.

Employment Ordinance Hong Kong Rights

The Employment Ordinance Hong Kong rights framework covers a broad range of protections. Every employee, regardless of length of service, is entitled to basic protections. Wages must be paid within seven days of the wage period. Statutory holidays apply. Protection against unlawful dismissal applies. Employees under a continuous contract gain additional entitlements , paid annual leave, sickness allowance, rest days, and termination benefits. The ordinance prohibits discrimination or victimisation against employees who exercise their statutory rights. Employers must display a copy of the ordinance or a summary of its provisions in the workplace, as required by the Labour Department.

Cap 57 Employee Protections

Cap 57 employee protections are designed to ensure fair treatment and financial security. The ordinance prohibits wage deductions except those it expressly permits: deductions for absence from work, for damage or loss caused by the employee, and for recovery of overpaid wages. Employers must not deduct more than one-quarter of an employee’s wages in any wage period for permitted deductions. The ordinance also protects employees from being required to spend wages at a particular shop or for a particular purpose. Where an employer fails to pay wages on time, the employee may treat the contract as terminated and claim wages in lieu of notice and a severance payment if eligible.

Hong Kong Employment Law Overview

A Hong Kong employment law overview must begin with the scope of Cap 57. The ordinance applies to all employees engaged under a contract of employment, whether written or oral, full-time or part-time. It does not apply to employees covered by the Contracts for Overseas Employment or to family members living with the employer. The Labour Department enforces the ordinance through inspections, conciliation, and prosecution. Employers who breach the ordinance face fines and imprisonment. The ordinance works alongside the Employees’ Compensation Ordinance (Cap. 282), the Mandatory Provident Fund Schemes Ordinance (Cap. 485), and the Minimum Wage Ordinance (Cap. 608).

Continuous Contract and the 4-18 Rule

An employee is under a continuous contract if they have been employed continuously by the same employer for four weeks or more, working at least 18 hours in each week. This is the 4-18 rule. A continuous contract unlocks most statutory entitlements under Cap 57: rest days, paid annual leave, sickness allowance, severance payment, and long service payment. The Labour Department provides guidance on calculating continuous employment, including periods of absence due to sickness, maternity leave, or public holidays. Keep accurate records of hours worked to determine whether the 4-18 rule is satisfied.

Rest Days

Every employee under a continuous contract is entitled to one rest day in each period of seven days. A rest day is a day free from work. The employer chooses a rest day for each employee. It must be consistent unless changed with the employee’s agreement. An employer may require an employee to work on a rest day only if the employee volunteers and the employer provides a rest day on another day within the same month. Keep a record of rest days granted and any work performed on rest days.

Statutory Holidays

All employees are entitled to statutory holidays, regardless of whether they are under a continuous contract. There are 12 statutory holidays each year. The list includes Lunar New Year’s Day, Ching Ming Festival, Labour Day, and National Day. If an employee is required to work on a statutory holiday, the employer must grant an alternative holiday within 60 days. Employees under a continuous contract are also entitled to holiday pay for statutory holidays. The Labour Department publishes a list of statutory holidays each year.

Annual Leave

An employee under a continuous contract is entitled to paid annual leave after completing 12 months of continuous employment. The entitlement starts at seven days for the first year and increases by one day each subsequent year, to a maximum of 14 days. Grant annual leave within 12 months of the entitlement date. Annual leave may be taken in a continuous period or, with the employee’s agreement, in separate periods. Pay the employee their normal wages for the period of annual leave.

Sickness Allowance

An employee under a continuous contract is entitled to sickness allowance after accumulating sufficient paid sickness days. The employee must have been employed for at least one month and must have accumulated at least four days of paid sickness leave for each completed month of service. The sickness allowance is paid at 80% of the employee’s average daily wages. The employee must provide a medical certificate signed by a registered medical practitioner. The employer may require the employee to attend a medical examination at the employer’s expense.

Severance Payment

An employee under a continuous contract for at least 24 months is entitled to a severance payment if dismissed by reason of redundancy or if laid off. The amount is two-thirds of the employee’s monthly wages for each year of service, capped at HK$390,000 per employee. Pay the severance payment within seven days of the termination date. The abolition of MPF offsetting from 1 May 2025 means employers may no longer use accrued benefits from mandatory MPF contributions to offset severance payment. The Government runs a subsidy scheme to share employers’ expenses on severance payment for service on or after 1 May 2025.

Long Service Payment

An employee under a continuous contract who is not covered by the severance payment provisions may be entitled to a long service payment upon dismissal for reasons other than redundancy, provided they have completed at least five years of continuous service. The calculation mirrors severance payment: two-thirds of monthly wages for each year of service, capped at HK$390,000. The abolition of MPF offsetting also applies to long service payment from 1 May 2025. Accrued benefits from voluntary MPF contributions and gratuities based on length of service may still be used to offset long service payment.

Payment in Lieu of Notice

An employer may terminate a contract of employment by giving notice or by making a payment in lieu of notice. The notice period is specified in the contract. If the contract is silent, the minimum notice period is seven days for a continuous contract of less than one month, and one month for a continuous contract of one month or more. The payment in lieu of notice is the amount of wages the employee would have earned during the notice period. Pay any other entitlements due, including annual leave pay and end-of-year payment, at the same time.

Summary Dismissal

An employer may dismiss an employee without notice or payment in lieu of notice in cases of summary dismissal. The grounds include wilful disobedience, gross misconduct, fraud, dishonesty, and habitual neglect of duty. The employer must have a reasonable belief that the employee has committed the act. The employee may challenge the dismissal as unreasonable or unlawful. The Labour Department provides conciliation services for disputes over summary dismissal.

End-of-Year Payment

An end-of-year payment, often called the thirteenth month payment, is not mandatory under Cap 57 unless expressly provided for in the contract of employment. If the contract provides for an end-of-year payment, pay it in accordance with the contract terms. The ordinance sets out rules for calculating the payment when the employee has not worked the full year. The payment must be made within seven days of the due date.

Maternity Leave

An employee under a continuous contract is entitled to maternity leave of 14 weeks. The employee must give notice to the employer of her pregnancy and intention to take maternity leave. Pay maternity leave pay at 80% of the employee’s average daily wages for the period of maternity leave. The employee is entitled to protection against dismissal during pregnancy and maternity leave.

Paternity Leave

An employee under a continuous contract is entitled to paternity leave of five days. The employee must give notice to the employer of the expected date of delivery and intention to take paternity leave. Pay paternity leave pay at 80% of the employee’s average daily wages. The employee may take paternity leave in a continuous period or, with the employer’s agreement, in separate periods.

Minimum Wage

The minimum wage in Hong Kong is set by the Minimum Wage Ordinance (Cap. 608). The current rate is HK$40 per hour. The rate applies to all employees, including those on piece rates, hourly rates, or monthly salaries. Keep records of hours worked and wages paid to demonstrate compliance. The Labour Department conducts inspections and may issue warnings or prosecute employers who pay below the minimum wage.

Employees Compensation Insurance

Every employer in Hong Kong must take out employees compensation insurance under the Employees’ Compensation Ordinance (Cap. 282). The insurance covers employees for injuries arising out of and in the course of employment. The policy must cover the full amount of compensation the employer may be liable to pay. Employers who fail to take out insurance face a fine of up to HK$100,000 and imprisonment for up to six months. The Labour Department enforces this requirement through inspections.

Contract of Employment

A contract of employment may be written or oral. Provide a written contract setting out the terms and conditions of employment. The contract must include the employee’s name, the employer’s name, the job title, the date of commencement, the wage rate, the wage period, the notice period, and any end-of-year payment entitlement. The contract must not contain terms less favourable than the minimum standards set by Cap 57.

Labour Department Enforcement

The Labour Department is the primary enforcement authority for Cap 57. It provides conciliation services for disputes. It conducts inspections. It prosecutes employers who breach the ordinance. File a complaint with the Labour Department if you believe your rights have been violated. The department may issue warning letters and require employers to rectify breaches. In serious cases, it may refer the matter to the Labour Tribunal for adjudication.