Guide to Hiring Staff in Hong Kong

Guide to Hiring Staff in Hong KongThe staff that you hire to keep your business running successfully in Hong Kong is very important. The staffs are the heart and soul of the company, the people who keep your business and your clients happy. It is important to ensure that you hire the right staff for the right roles within your company and to ensure they are well taken care of.

Hiring staff in Hong Kong has a process of legal formalities that all employees need to thoroughly understand. This guide to hiring staff in Hong Kong will look at the key points which all employers should take note of. Abiding by the employment legislation in Hong Kong requires that all companies comply with the following with hiring employees:

  • Take note of the legal restrictions and guidelines involved when it comes to hiring both local and foreign staff.
  • Take note of Hong Kong’s labor laws because they have a binding effect on both the employers and the employees.
  • Take note of the common practices and expectations involved in the hiring process
  • Take note of Hong Kong’s recruitment guidelines.

 

Hong Kong’s Terms and Conditions for Hiring

Employment laws in Hong Kong are governed by the Employment Ordinance, which is major legislation in the country which relates to the labour and employment issues in the country.

The Employment Ordinance highlights what the individual’s right are, the duties, responsibilities of both the employer and the employee, and even governs the details of the employment contract. This is to ensure that all employees are adequately protected.

Before you, as the employer, can hire anyone, you would need to assess if your employee is covered by the Employment Ordinance. If your employee is not covered, then the terms of the employment contract would depend on the mutual agreement that is conducted between you and the prospective employee.

In Hong Kong, the Employment Act separates employees into two categories, which are:

  • Those employed under a continuous employment contact (entitled to all the statutory benefits under the Employment Ordinance)
  • Those employed under an employment contract (entitled to basic protection under the Ordinance)

The Employment Ordinance covers all employees in Hong Kong, both temporary and part-time included. However, the following individuals will not be covered under the ordinance:

  • A family member who lives together with the employer
  • An employee who falls outside the definition of the Contracts for Employment Outside Hong Kong Ordinance.
  • Any individual who is covered under the Merchant Shipping (Seafarers) Ordinance.
  • Any individual who is an apprentice, and has been registered under the Apprenticeship Ordinance. They will be entitled to some, but not all of the protection offered by the Employment Ordinance.

The key features of the Employment Ordinance in Hong Kong are as follows:

 

Key Aspects Employment Contract Continuous Employment Contract
Maximum Work Hours/week Per contract

(Normally 40-50 hours)

Per contract

(Normally 40-50 hours)

Maximum Work Days/week Per contract (Normally 5 days) Per contract (Normally 5 days)
Overtime Per contract Per contract
Probation Per contract (Normally 1-6 months) Per contract (Normally 1-6 months)
Termination Per contact (no less than 7 days). If there is no contract, common practice dictates 1 month. Per contact (no less than 7 days). If there is no contract, common practice dictates 1 month.
Long Service Payment Not applicable Minimum 5 years of work (subject to conditions)
Public Holidays (Paid) 12 Days 12 Days
Annual Leave (Paid) Not applicable 1st Year: 7 days.

2nd Year: 8 days.
3rd Year: 9 days (maximum of 14 days)

 

Sick Leave (Paid) Not applicable 1st Year: 24 days
2nd Year: 48 days
Maternity Leave (Paid) Not applicable 10 weeks, subject to certain conditions.

 

Medical Insurance Per contract Per contract
MPF Contribution Yes Yes

 

Obtaining work visas and permits in Hong Kong is a process which could take up to 8-weeks to resolve. Therefore, if you’re planning to hire expats in your Hong Kong-based company, it is best to get started on the visa process as soon as possible.

 

An Employer’s Duties and Responsibilities

As an employer in Hong Kong, you will have a certain set of responsibilities to comply with. Drafting an employment contract is one of them. Key points of an employment contact include:

  • Must include both explicit and implied terms
  • Must abide by the minimum requirements under the Employment Ordinance, if your employee is covered under the ordinance.
  • Can either be in written or oral form
  • In written form, both the employer and employee must have a copy of the contract
  • Employers must obtain consent from the employees before making any changes to the contact

An employment contract must also include the following:

  • Code of conduct
  • Name of appointment position
  • The duration of the employment contract
  • What the employee’s obligations are
  • When the date of employment begins
  • The number of hours the employee is expected to work
  • What benefits the employee gets (paid sick leave may be up to 24 days for the first year of employment, and 48 days for the second year)
  • An applicable probation cause if available
  • The terms of the termination of contract (must be no less than 7 days’ notice)

 

Social Security Requirements in Hong Kong

Both the employers and employees in Hong Kong are required to make monthly contributions to the Mandatory Provident Fund. The contribution rate is set at 5% for both parties, and it is based on a maximum salary of HKD30,000 per month.

If your company hires an expat who has been working longer than 13 months in Hong Kong, then that employee will need to be registered to contribute to social security. However, the employee may be exempt if they are already paying social security in their own home country.

 

Hiring Requirements in Hong Kong

Hong Kong employees must be 18-years and above to work legally in the country. For anyone aged 13 to 17-years, there are restrictions on the type of work which they can perform. At the moment, Hong Kong does not have a mandatory retirement age, although the common practice is for employees to retire by the age of 65-years.

The Labor Department of Hong Kong has set in place certain guidelines for employers to follow when it comes to recruiting employees. These guidelines are meant to prevent discrimination (sex, disability, family, race etc). The guidelines employers should adhere to are:

  • Using a consistent selection criteria for recruiting employees.
  • Shortlist candidates based on their skills and capabilities
  • Ask questions during the interview which are related directly to the job requirements
  • Use professionally designed tests which are directly related to the job for selection criteria (if any)
  • Recruit based on skills, ability and experience. This should take precedence over gender, religion, race, family status, disability or age.
  • Application forms must not contain questions which lead to discrimination
  • Carefully review all advertising material and accompanying literature related to employment.
  • Employees who oversee recruitment should be trained to avoid discrimination.

If you intend to hire part-time employees or contractual staff, it is common practice in Hong Kong that part-time employees will work less number of hours than full-timers too. The Hong Kong Employment Ordinance doesn’t formally define part-time or contractual employees, but these employees will enjoy the same protection as full-time staff do.

As for hiring students, if they are Chinese national or PR holders, they can be hired on either a full or part-time basis without any restrictions. Students and interns will be entitled to MPF contributions. Interns are paid a monthly allowance.

If the students are foreigners, they can be hired as interns if they are full-time students of locally accredited degree level programs or above. The study period must be no less than one academic year, and the internship must be curriculum or study related, and be endorsed by the institution of study. There are no restrictions on the level of salary, nature of work, location or working hours.

Foreign students may also opt for part-time on-campus jobs and work for no more than 20-hours per week throughout the year. They may also work during the summer months without limit on the work hours or location. This arrangement, however, excludes exchange students.

 

Employing Foreign Employees in Hong Kong

The Hong Kong government is a strong advocate for local employees, encouraging employers to first look to the local workforce before opting to hire foreigners to fill the roles within companies. Foreigners who have the skills, knowledge, expertise and experience which are needed by the local Hong Kong workforce will be allowed to stay and work as professionals employed in Hong Kong. If you wish to hire a foreign employee, you will need to prepare the appropriate and valid work visas on behalf of your employee before they can commence working with you.

Foreign employees in Hong Kong fall into two categories, which are skilled professionals (software engineers, doctors, R&D specialists) who will be given an Employment Visa, and semi-skilled professionals (technicians) who will be given a Supplementary Labor Scheme visa.

 

Employment Visa Supplementary Visa
  • Foreign professional staff who have graduated from an academic institute in Hong Kong
  • Foreign professional staff and mainland Chinese who have not graduated from Hong Kong but possess special skills, knowledge or experience of value to and not readily available in Hong Kong.

 

  • Semi-skilled professionals at technician level or below.

 

Valid for 1 year initially. Renewable thereafter Valid for 1 year initially. Non-renewable
Not based on the quota system Not based on the quota system
Dependent Pass Holders are eligible Dependent Pass holders are not eligible
Available restrictions on nationality Available restrictions on nationality
No levies imposed No levies imposed

 

The Mandatory Provident Fund (MPF) Scheme

All employees will be required to contribute to this fund, including part-time, casual and temporary staff. Both employers and employees must contribute 5% of the employee’s monthly salary (the maximum income is capped at HK$30,000). The MPF scheme is not mandatory if an employee’s income is below HK$7,000 per month. Only the employer will have to contribute in this case.

Individuals who are exempted from this scheme are:

  • Domestic employees
  • Foreigners working in Hong Kong for less than 13 months
  • Self-employed hawkers
  • Individuals covered by a statutory pension or provident fund schemes
  • Employees of the European Union Office (European Commission in Hong Kong)
  • Individuals who are members of occupational retirement schemes granted by MPF exemption certificates