Drafting a Hong Kong Employment Contract the Right Way
Own a business and want to learn how to Drafting Employment Contracts in Hong Kong? Commonly dubbed as the ‘land where East Meets West’, Hong Kong is a global centre of trade. The ever-growing Chinese economy is an ideal platform for business opportunity seekers. Learning how to draft employment contracts in Hong Kong is vital for you to run your business successfully.
What is an Employment Contract?
In the simplest form, an employment contract is a legal agreement between an employee and an employer or labourer. After signing an offer letter, an employment contract is drafted. The deal will contain all provisions concurred by both parties. Drafting employment contracts in Hong Kong is pivotal as it helps you to lay ground rules between you and your employee.
Why is an Employment Contract Important?
An employment contract is critical in any nature of business as it clearly states the mutual obligations, responsibilities, establishments and a multitude of other clauses of the employer and employee. This will ensure both parties are well aware of their respective tasks and set the seal on their duties. Employment contract also helps the parties involved to steer clear of any misunderstandings, miscommunications and misconstruction during the duration of the bond. Consequently, this minimises work violations and abuse because the employer and employee will be bound by law.
What Should I Include in My Employment Contract?
Keep in mind that every employment contract differs from the type of company, position or post held, and the nature of work. Therefore, add or minus clauses and tailor it accordingly to fit the needs of your Hong Kong company and its future employees. With that being said, a well-written Hong Kong employment contract consists of:
- Scope of work
- Employment Period
- Compensation and benefits
- Holidays and leaves policies
- Confidentiality and non-disclosure agreements
What Constitutes an Employment Contract in Hong Kong?
One of the most critical legislation rules for businesses in Hong Kong is the Employment Ordinance; this law helps to ensure that the rights of the employees are protected and taken care of. Hong Kong’s Employment Ordinance states that an employer must thoroughly explain the conditions of employment to every employee. The agreement must include necessary information, such as, wage rates, overtimes, statutory holidays, allowance, wage period, duration of notice required to terminate the contract and extra payments, which includes year-end payments too. Your agreement must adhere to the Employment Ordinance; failure to comply with the said set of laws will automatically make your employment contract illegal.
What Should I Look Out for?
Before drafting employment contracts in Hong Kong, do a proper reading of the Employment Ordinance as there are many niche clauses, such statutory holidays, maternity/paternity leaves, annual and sick leaves, employees’ rest days, wages and allowances. Be careful as you can be charged with hefty penalty fees if your contract does not follow the ordinance.
The final step is to consult 3E Accounting. We understand that perfecting an employment contract is tedious work. That’s why 3E Accounting is ready to assist in guiding and advise you on how to develop a good Hong Kong Employment Contract. Our team of experts are highly trained and eager to help make your contracts come true. Call us now to start drafting your Hong Kong Employment Contract today!