Hong Kong sickness allowance entitlement and qualifying conditions

Hong Kong Sickness Allowance Entitlement and Qualifying Conditions

Statutory sickness allowance is a wage replacement payment an employer must make to an employee absent due to illness or injury. The entitlement is governed by the Employment Ordinance (Cap. 57). It applies only to employees who have completed a qualifying period of continuous service.

Hong Kong Sickness Allowance Entitlement

The statutory right to sickness allowance arises when an employee has been employed under a continuous contract for at least one month and has accumulated sufficient paid sickness days. The Employment Ordinance (Cap. 57) sets out the framework. This entitlement is separate from any contractual sick leave an employer may choose to offer. An employee who meets the qualifying conditions receives sickness allowance at 80% of normal wages for each day of sick leave taken, subject to a cap on the total number of paid sickness days that can be accumulated.

Hong Kong Sickness Allowance Qualifying Conditions

Three conditions must be satisfied. The employee must be employed under a continuous contract as defined by the 4-18 rule. The employee must have accumulated sufficient paid sickness days. The absence must be supported by a medical certificate issued by a registered medical practitioner.

The 4-18 rule is the prerequisite for most statutory entitlements under the Employment Ordinance. An employee is deemed to be 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. Once this threshold is met, the employee qualifies for sickness allowance, rest days, paid annual leave, and severance payment.

Hong Kong Employment Ordinance Sick Leave Pay

The Employment Ordinance (Cap. 57) specifies that sickness allowance is payable at 80% of the employee's normal wages. Normal wages include basic salary, commissions, overtime pay, and other regular payments. Discretionary bonuses, end-of-year payments, and MPF contributions are excluded. The allowance is calculated on a daily basis. The employer must pay it on the normal wage day following the sick leave period.

An employee who takes a paid sickness day is also entitled to any statutory holiday, rest day, or annual leave that falls within the sick leave period. These days are separate entitlements and do not reduce the employee's accumulated sick leave balance.

Hong Kong Statutory Sickness Allowance

Statutory sickness allowance is distinct from contractual sick pay. An employer may offer more generous sick leave terms in the employment contract. The employer cannot provide less than the statutory minimum. The Labour Department enforces compliance with the Employment Ordinance and can order an employer to pay unpaid sickness allowance.

The allowance is not payable for the first day of sick leave unless the employee has been hospitalised. For absences of fewer than four consecutive days, no sickness allowance is due, even if the employee has accumulated paid sickness days. The employee must be absent for at least four consecutive days to trigger the entitlement. A medical certificate must cover each day of absence.

Hong Kong Paid Sickness Days

An employee accumulates paid sickness days at the rate of two days per month during the first 12 months of employment under a continuous contract. After the first year, the accumulation rate increases to four days per month. The maximum number of paid sickness days an employee can accumulate is 120 days. Once the cap is reached, no further days are added until the employee uses some of the balance.

The accumulation is calculated from the employee's first day of employment under a continuous contract. Unused paid sickness days carry forward from one year to the next, subject to the 120-day maximum. Maintain a record of each employee's accumulated sick leave balance and provide it upon request.

Medical Certificate Requirement

A valid medical certificate is mandatory. The certificate must be issued by a registered medical practitioner and must state that the employee is unfit for work due to illness or injury. It must cover each day of the sick leave period, including the first day if the employee was hospitalised.

The employee must give notice of the sickness absence to the employer within 48 hours, unless the employer has specified a longer period in the employment contract. Deliver the medical certificate to the employer within the same timeframe. If the employee fails to provide the certificate, the employer may refuse to pay sickness allowance for that absence.

Sickness Allowance Rate and Calculation

The sickness allowance rate is 80% of the employee's normal wages. The calculation is based on the employee's average daily wages earned in the 12 months preceding the sick leave. For employees with less than 12 months of service, the calculation uses the period of employment. Determine the daily wage by dividing the total wages earned during the relevant period by the number of days worked.

Pay the allowance on the next normal wage day after the sick leave period ends. If the employee takes sick leave that spans multiple wage periods, the employer may pay the allowance in instalments. The Labour Department provides a calculation tool on its website to assist employers in determining the correct amount.

Distinction From Employees’ Compensation Insurance

Sickness allowance under the Employment Ordinance (Cap. 57) is separate from compensation payable under the Employees’ Compensation Ordinance (Cap. 282). Employees’ compensation insurance covers work-related injuries and occupational diseases. The compensation rate and qualifying conditions differ. An employee who suffers a work-related injury may be entitled to both sickness allowance and employees’ compensation. The employer cannot deduct one from the other. Maintain employees’ compensation insurance as required by law, regardless of the employee’s length of service.

Employer Obligations and Record Keeping

Keep a record of each employee’s accumulated paid sickness days, the dates of sick leave taken, and the medical certificates provided. The Employment Ordinance requires employers to retain these records for at least six months after the employee’s departure. Failure to maintain proper records can result in a fine imposed by the Labour Department.

An employer who refuses to pay statutory sickness allowance without a valid reason may be ordered by the Labour Department to make the payment. The employee can also pursue a claim in the Labour Tribunal. The Employment Ordinance prohibits an employer from dismissing an employee for taking paid sick leave. Such dismissal may be deemed unreasonable.