Hong Kong Employment Contracts
Hong Kong Contracts
If a foreign company is looking to hire resident employees as part of their international expansion into Hong Kong, they must comply with recruitment regulations such as tax, social security contributions and local employment laws, as well as collaborate with or adhere to any collective bargaining, trade unions or work council agreements.
Labor law in Hong Kong is based on both employer and employee protection.
In Hong Kong, it is common practice for employment contracts to be presented to employees in writing. There are two contract types to choose from – with the main differences between them being the contract length and benefits entitlement.
The Employment Ordinance is the governing law of employment, and includes the influence of trade unions and work councils. However, this may vary according to the industry and sector.
To be fully aware of what you can and cannot apply to your employment practices in Hong Kong, it is important for the employer to know the existing labor laws and employee entitlements, as well as collaborate with the appropriate local employment organizations.
In Hong Kong, it is not required for an employment contract to be in writing, but it is strongly encouraged by the Labor Department and is common practice. However, upon the employee’s request, the employer must provide a written document with the terms and conditions of the employment in writing.
If an employment contract is to be in writing, the employee is to be provided with a copy of the signed employment contract, with the following information – wages, the wage period, the length of notice for termination of the employment contract, and end-of-year payments, if applicable.
There are two types of employment contracts:
- An employment contract – Employment contracts provide employees with basic protection under the Ordinance, which includes wage payments, wage deduction restrictions, statutory leave, etc. Every employment contract is implied to be valid for one month and is renewable from month to month until it is deemed a continuous contract.
- A continuous employment contract – Continuous employment contracts, however, entitle employees to all statutory benefits under the Employment Ordinance – rest days, paid annual leave, sickness allowance, severance payments, etc.
A continuous contract of employment is the standard contract for most employment cases and can be defined as a contract in which the employee works for the same employer for 4 weeks or more, and at least 18 hours every week. All benefits are offered to employees – including rest days, paid annual leave, sick allowance, severance payments, long service payments, and extra benefits.