Q1: What are Hong Kong’s employment rules?

General Employment Information

Employment Contract:

There is no legal requirement for an employment contract in writing, but of course it is STRONGLY recommended. Upon employee request, the employer must provide signed terms and conditions of employment in writing. At the bare minimum, the basic information should include:

  - Wage Structure (monthly wage, overtime, bonus, commissions, etc)
- Wage Period
- Working Hours
- Length of termination notice

Probation:

No minimum or maximum of months - as agreed to in the employment contract. Under the ordinance, both employer and employee have the right to terminate the employment contract within the first month of the probation period. For extension of probation, there is no stipulation: that is to be agreed upon between the employer and employee.

Rest Day:

The employee is guaranteed at least one rest day every seven days.

Working Hours:

There are no legal restrictions on maximum or minimum working hours for employees.Should be agreed upon in an employment contract.

Leave

Annual Leave:

The following table shows the minimum for annual leave entitlements based on years of employment

Sick Leave:

First 12 months - accumulate two paid sick leaves a month.

After 12 months - four paid sick leaves a month. Maximum of 120 paid sick leave days can be accumulated. Minimum rate of pay is 80% of average daily wages.

The employer can request sick leave to be supported by an appropriate medical certificate. If paid sick leave is over 36 days, upon employers request, a medical certificate issued by a registered medical practitioner attending to the employee as an out-patient or in-patient in a hospital should be produced.

Maternity / Paternity

Maternity:

An employee is entitled to 14 weeks of paid maternity leave at 80% of average daily wages (based on previous 12 month period). They must be under continuous contract for over 40 weeks before commencing paid maternity leave. They are also entitled to additional months for up to 4 weeks on the grounds of pregnancy or labour related illness or disability.

Paternity:

5 days of paternity leave at 80% of daily wages (based on previous 12 month period), given under contract for over 40 weeks before starting paternity leave.  

Wages

Minimum Wage:

HKD 37.50 per hour (as of May 1, 2019)

Overtime:

Employees do not have a legal entitlement to receive overtime payments. Their entitlement to overtime payments should be provided in the contract of employment.

Insurance

Employee’s Compensation Insurance

Companies require a valid insurance policy to cover liabilities under the Employee’s Compensation Insurance and common law for work injuries for employees. Most insurance companies offer coverage, and are relatively inexpensive. For Wantedly’s team of 6, it’s an average of 1000HKD / per person / per year.

Other insurance coverages are not mandated by law.

Q2: What are the responsibilities of employers in Hong Kong?

MPF

Mandatory Provident Fund - HK’s pension scheme is, as its name suggests, is a mandatory contribution for each employee. To simplify things:

1. Choose a MPF Trustee (service provider). All of your employees contributions will be handled by this provider. We have a comparison of different accredited providers here. 

2. The service provider will provide instructions on how to set up your account and enroll employees.

MPFs for each employee must be created for any employee:
- Between the age of 18-64
- Working full time or part time
- Employed for 60 days or more (total time, not working days)

Essentially, MPF needs to be set up for the employee within their first 2 months of work.

Table: Required Minimum Contribution Amount 

Paperwork Requirements for Stop/Start of Employment:

See this table below for information on the paperwork needed to be filed for employment status changes.

Source: https://www.ird.gov.hk/eng/pdf/ir56h_e.pdf

                  IR56E*1 / IR56B*2 / IR56G*3 / IR56G*4

Q3: What are the income tax obligations for employers?(suggested theme: who pays the income tax, the company or the employee?)

In Hong Kong, it is the employee’s responsibility to file annual tax declarations and pay the Inland Revenue Department for any staff that has annual remuneration above HKD132,000.

Companies need to report remuneration paid to employees by submitting an annual employer’s return, Both these documents must be submitted annually, at the start of the tax year (April 1).

- BIR56A (essentially the cover page for the report) 

Where to file the document

Example of a completed report 

- IR56B (each employee’s remuneration report)

Where to file the document

Example of a completed report

Q4: A lot of startups are actively hiring students. What are the legalities of hiring an intern?

Contrary to belief, minimum wage and the rest of the employment ordinance applies to internship positions, UNLESS they are student interns or work experience students that qualify for exemption from minimum wage.

Student Internship:

 - Arranged or endorsed by an educational institution, as part of a component of their programmes.
 - Educational institution will issue a document to qualify employee as a student intern.
 - No age, no duration restriction.

Work Experience Students:

 - Enrolled in a local accredited program; or resident in Hong Kong and enrolled in non-local full-time programme
- Must be under the age of 26, max internship duration of 59 days
- At most once a year
- Needs to fill out this: declaration form.

In a nutshell:

- If hiring as an official employee, the employment ordinance and minimum wage applies - If hiring as a student / work placement, the necessary conditions and documentation must be met  

In general, companies treat this very loosely, and no-pay or below minimum wage internships are common, although technically illegal. At Wantedly, we believe that interns are valued part of the team, and their contributions should be rewarded as such in accordance with the employment ordinance. 

Source: https://www.labour.gov.hk/eng/news/pdf/Notes_for_Student_Employees_and_Employers.pdf

Q5: The legal aspects of hiring an employee are just the beginning. What are the recruitment strategies to attract top performers?

It sounds easy and intuitive: put the candidate at the center of the recruitment process. What does this mean?

Employer Branding - Present your company and job position in a way that the candidate will be excited and motivated about the prospect of joining your company. Every company will have different features to highlight. Some examples are below:

  Purpose - What are you working towards?

  The team - Talent attracts talent.
Company culture - What’s it like working at your company? This can be better communicated in images rather than words.
Financial health - Candidates want to join a growing organization, or an organization that has a future. If you have any numbers that are shareable, that will give your company a vote of confidence.
Product / Services - Your body of work.   

Recruitment Process - Streamline your recruitment process to make it talent-friendly, and remove processes that don’t tell you anything meaningful about the candidate. (For their sake and your sake as well!)

  Example: A recent user told us, as a 30+ year old professional transitioning into a middle management role, the HR department asked for their university diploma and transcript. We’re not sure what the rationale was, but if it doesn’t give you further insights on the candidate, streamline it!  

Value Candidates’ time - if you think a candidate is a top performer, you can bet that you’re not the only organization the candidate is interviewing with. Respect and value the candidate’s time. Simply put, being prepared and punctual for interviews, as well as responding in a timely manner will go a long way to show to the candidate that you’re serious about them.

Above are some ideas and examples, but building a strong recruitment funnel and employer brand takes conscious planning and effort. If you’re looking for ideas and help, click here and get in touch with Wantedly!