Mandarin

UTC +08:00

Undoubtedly, payroll is a critical process for any organization. The pay cycle refers to the period for which an organization pays its employees, and this can vary depending on the pay frequency that the organization chooses to adopt.

Employees are paid monthly. The wages must be paid within seven days after they are due. The due date is decided between the employer and the employee.

In Hong Kong, it is customary to pay a 13th salary during the Lunar New Year or at the end of the year.

The minimum wage has been revised in Hong Kong from 01 May 2023. The national minimum wage is increased from HK$37.50 to HK$40.00 per hour.

Overtime hours are optional and there are no statutory limits in Hong Kong regarding them.

Employers must keep records of an employee's name, address, and the first day of employment for at least six months after the employee terminates. Employers must keep records of an employee's income and dates on which Mandatory Provident Fund contributions were made at least six months after completing the contributions. Information contained in the trustee's remittance statement, including the amount of each employee's applicable income and the amounts of mandatory and voluntary contributions, must be kept for at least seven years from the date of the remittance statement.

Under the current PDPO, data users must take all practicable steps to ensure that personal data is not kept longer than is necessary for fulfilling the purpose (including any directly related purpose) for which the data is or is to be used. Therefore, the current regime provides little specification or guidance as to when personal data is no longer necessary for fulfilling its purpose. No maximum or uniform retention period currently is prescribed by Hong Kong law.

An employer is not legally required to give hiring preferences to any particular group of people. However, employers cannot discriminate based on sex, race, color, descent, national or ethnic origin, disability, marital status, pregnancy, family status, or trade union membership.

Work injury compensation increased

With effect from April 1, 2023, The Employees' Compensation Ordinance will increase compensation levels for employees injured at work or suffering from occupational diseases by 2.18 to 19.05% for 18 compensation items.

One of the items is a 2.18 percent increase in the maximum amount of funeral expenses, from HK$ 92,670 to HK$ 94,690. Another change is the HK$ 24,000 financial limit for first-time hearing assistive device (HAD) applications, which has risen by HK$ 3,840, or 19.05 percent.

Occupational Safety and Health Legislation:

With effect from April 28, 2023

• The Occupational Safety and Occupational Health Legislation became operative on April 28, 2023, after being gazetted.
• Employers that violate Hong Kong's statutory occupational safety and health rules will now face dramatically increased penalties and up to two years in jail.
• Minor crimes range between HKD 10,000 and HKD 25,000 (employer)/ HKD 10,000 (employee); Serious offenses range between HKD 50,000 and HKD 100,000 (employer)/ HKD 50,000 (employee); and very serious offenses range between HKD 200,000 and HKD 400,000 (employer)/ HKD 150,000 (employee).

All employees are entitled to statutory holidays. Most employers, however, extend entitlement to all general holidays. There are 12 statutory holidays and five general holidays

• Jan 1 and Jan 2: New Year
• Jan 22 to Jan 25: Lunar New Year
• Apr 5: Ching Ming Festival
• Apr 7: Good Friday
• Apr 8: Holy Saturday
• Apr 10: Easter Monday
• May 1: Labor Day
• May 26: Buddha's Birthday
• Jun 22: Dragon Boat Festival
• Jul 1: Hong Kong Special Administrative Region Establishment Day
• Sept 30: The day following the Chinese Mid-Autumn Festival
• Oct 23: Chung Yeung
• Dec 26: Day after Christmas 

An employee employed under a continuous contract is entitled to sickness allowance if

• The sick leave taken is not less than four consecutive days
• Sick leave is supported by an appropriate medical certificate
• The employee has accumulated enough paid sickness days

An employee can accumulate paid sickness days after being employed under a continuous contract.

Paid sickness days are accumulated at the rate of two paid sickness days for each completed month during the first 12 months and four paid sickness days for each completed month. After that, paid sick days can be accumulated throughout the whole employment period but shall not exceed 120 days at any one-time Sickness allowance: The daily rate of sickness allowance is a sum equivalent to 4/5 (80%) of the average daily wages earned by an employee in the 12 months preceding the sickness day.

New electronic medical or sick leave certificates

With effect from March 6, 2023, the Hospital Authority (HA) launched e-sick leave certificates will fully adopt a digital signature with an electronic version from March 6, 2023, to replace the traditional manually signed paper certificates. The new version of the medical certificate will adopt a digital signature without requiring a doctor to sign manually.

Fourteen weeks and can begin at any time between two and four weeks before the expected date of birth of the child.

The employee is eligible for maternity leave pay if she has been employed under a continuous contract for at least 40 weeks immediately before the commencement of scheduled maternity leave.

The daily rate of maternity leave pay is 4/5 (80%) of an employee's average daily wages in the 12 months preceding the first day of maternity leave.

The employee is eligible for paternity leave pay if he has been employed under a continuous contract for at least 40 weeks immediately before the day of paternity leave.

The daily rate of paternity leave pay is 4/5 (80%) of the average daily wages earned by an employee in the 12 months preceding the day of paternity leave.

Business, personal, or employee wrongdoing is grounds for termination under a fixed-term contract. The termination notice must be in writing, including the cause for the termination, and be delivered in person to the employee.

The Employment Ordinance allows either party to an employment contract to terminate at any time by providing the following required notice or payment in lieu of notice to the other party:

• During the probation period (Within the first month of probation): Not required
• After the first month of probation (With agreement): As per agreement but not less than seven days
• Without agreement: Not less than seven days
• No probation period/after probation period (With agreement): As per agreement but not less than seven days
• No probation period/after probation period (Without agreement): Not less than one month

In the case of a monthly rated employee, two-thirds of the employee's last month's wages (subject to a cap of HK$15,000) are multiplied by the years of service. Service of an incomplete year will be calculated on a pro-rata basis.

For daily or piece-rated employees, 18 days' wages are based on any 18 days chosen by the employee and occurring during their last 30 normal working days or two-thirds of HK$22,500, whichever is less, multiplied by the years of service.

Foreigners generally must apply for a work visa from the Immigration Department and show that they possess special skills or experience not readily available in Hong Kong or that they can make a substantial contribution to the economy of Hong Kong. Employers of non-professional workers must get initial approval from the Labor Department before applying to the Immigration Department.

There are several separate programs for applicants for work visas:

Foreigners who possess special skills may apply to work under the General Employment Policy for professionals. The GEP does not apply to Chinese residents of the mainland but includes Chinese nationals holding the People's Republic of China passports who have a permanent residence or who have been residing for at least one year immediately before the submission of the application in countries or territories outside Hong Kong, the Mainland, and the Macau Special Administrative Region.

The foreigner and the employer must apply with the Immigration Department. The applicant must have a confirmed offer of employment with a remuneration package that is broadly commensurate with the prevailing market level for professionals in Hong Kong. The employer must state reasons why residents cannot fill the post.

Foreigners who have obtained a degree or higher qualification in a full-time and locally accredited program in Hong Kong may apply to work in Hong Kong under the Immigration Arrangements for Non-local Graduates program (IANG). A person who graduated more than six months before the submission date of an application must have an offer of employment. However, a person who applies within six months of graduation is not required to submit proof of a job offer. The non-local graduate and the employer must apply with the Immigration Department. The employer must state why a resident cannot fill the post. These visas are granted for one year and may be renewed.

Chinese residents of the mainland who are not non-local graduates but possess special skills may apply under the Admission Scheme for Mainland Talents and Professionals (ASMTP).

The Mainland resident and the employer must apply with the Immigration Department. The applicant must have a confirmed offer of employment with a remuneration package that is broadly commensurate with the prevailing market level for professionals in Hong Kong. The employer must state why a resident cannot fill the post.

The GEP, IANG, and ASMTP are all quota-free but are limited to professionals in any employment sector, including commercial and financial fields, the arts, culture, and sports.

The IANG and GEP do not apply to nationals of Afghanistan, Cambodia, Cuba, Laos, North Korea (Democratic People's Republic of Korea), Nepal, and Vietnam. The IANG does not apply to nationals of Albania.

Non-professional workers may be admitted under the Supplementary Labor Scheme (SLS). Employers must first apply to the Labor Department for approval in principle to import workers and show genuine difficulties in finding workers locally. To ensure priority for employment of local workers, each application has to be advertised in a newspaper and is subject to a mandatory local recruitment period at the Labor Department and retraining courses for residents if appropriate. After approval is granted, the employer and each prospective worker must submit applications to the Immigration Department within three months of the approval.

The program does not apply to nationals of Afghanistan, Cambodia, Cuba, Laos, North Korea (Democratic People's Republic of Korea), Nepal, and Vietnam. There are no industry-specific quotas.

Workers are allowed to work only for the employer who made the application under an employment contract with a maximum duration of 24 months and must return to their place of origin when the contract expires.

Employers and foreign domestic workers may apply with the Immigration Department for a work visa. Domestic workers must have at least two years of experience. The employer must have a household income of at least HK$15,000 per month or assets of a comparable amount to show the financial ability to employ a live-in domestic worker.

The program does not apply to Mainland residents, Macau Special Administrative Region residents, Chinese residents of Taiwan, or nationals of Afghanistan, Cambodia, Cuba, Laos, North Korea (Democratic People's Republic of Korea), Nepal, and Vietnam.

Background checks are generally allowed, but employers should be aware of the prohibitions under the discrimination and data privacy laws in Hong Kong.

In particular, the background check should not be conducted in a manner that amounts to unlawful discrimination. Employers should ensure the collection and processing of the applicants' personal data comply with the requirements of the Personal Data (Privacy) Ordinance (e.g., providing a personal information collection statement, not collecting excessive data, and only collecting information that is relevant to assessing the suitability of the applicants, ensuring the security of the personal data). It is also good practice for employers to obtain the applicant's written consent before conducting the background check.

It should also be noted that under the Rehabilitation of Offenders Ordinance, subject to certain exceptions, the conviction of a person who is not sentenced to imprisonment exceeding three months or to a fine exceeding HK$10,000 and who has not previously been convicted in Hong Kong of any offense will be treated as spent once three years have elapsed without another conviction for an offense in Hong Kong. Under the Ordinance, neither the spent conviction nor any failure to disclose it justifies dismissal or exclusion from any employment or any form of prejudice in employment.

A third party engaged in the hiring process would likely be considered a data processor under the Personal Data (Privacy) Ordinance. As the employer would be liable for any wrongful acts by the data processor, the employer should adopt contractual or other means to ensure the third-party data processor complies with the requirements of the data privacy laws in Hong Kong.