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  1. Overview: Hong Kong
  2. Contractor vs. Employee: Which Is Better?
  3. Global HR Compliance
  4. Work permit for hiring expats via PEO
  5. Expand without a company set up
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Global HR Compliance in Hong Kong

Hong Kong has long been a magnet for global businesses thanks to its robust financial systems, strategic location, and favourable business policies. Whether you’re planning to break into the Hong Kong market or are already operating there, understanding the local employment laws and practices is critical. This guide aims to help you navigate the HR compliance landscape in Hong Kong effortlessly.

Entering the Hong Kong job market brings unique challenges, particularly around local employment laws. Navigating these complexities while managing a multinational workforce can be daunting. That’s where Express Global Employment comes into the picture, simplifying your entry into the Hong Kong market.

Ensuring Compliance: Mitigate Risks and Maintain Credibility

Companies often need a reliable Global Employer of Record to ensure legal compliance when employing staff internationally. By opting for our services, you delegate the complexities of hiring, remunerating, and managing benefits across over 100 countries to us. This ensures a streamlined process that’s fully compliant with local laws.

Proactive Legal Compliance

Failing to comply with local employment laws can lead to serious financial and reputational risks. Our global employment service offers real-time compliance updates and risk assessments, thus safeguarding your business against non-compliance. This proactive approach lets you focus on your core business functions while we handle the legalities.

The Risk of Employee Misclassification

Incorrectly classifying employees can result in legal repercussions and financial penalties. Express Global Employment ensures that your international workforce is correctly classified according to Hong Kong’s local laws, removing the burden of risk and liability from your company.

Cost-Effective Global Expansion with Express Global Employment

Expanding internationally often involves setting up legal entities in each country, a process that can be both time-consuming and expensive. Plus, maintaining these entities according to varying local laws adds an additional layer of complexity to your operations.

Our Global Employer of Record services eliminates the need for multiple country-specific legal setups. By managing your HR needs, we offer a more cost-efficient way to expand your business globally. This lets you focus on market penetration and growth without being bogged down by HR issues.

24/7 Expert Support

Our English-speaking experts are available 24/7 to offer timely and accurate advice. This means you can make informed decisions quickly, irrespective of different time zones, thereby accelerating your business processes.

Compliance and Sustainability for Long-Term Growth

We not only ensure that your global workforce complies with Hong Kong’s local payroll, tax, social security, and immigration requirements but also set you up for long-term, sustainable growth. By effectively managing compliance, we act as a strategic partner in your international business journey.

Your One-Stop Solution for Global Workforce Management in Hong Kong

Navigating the complex landscape of global workforce management can be overwhelming, especially when dealing with multiple jurisdictions like Hong Kong. As specialists in global employment solutions in Hong Kong, we aim to become your all-inclusive global employment solutions provider for all your international hiring needs.

Traditional approaches to global workforce management often involve liaising with many local staffing agencies and legal advisors. This fragmented approach complicates your operations and places significant demands on your time and resources. Our comprehensive services offer an alternative: a single, unified solution that addresses all your global employment challenges head-on.

You can unlock significant cost savings by entrusting us with your global employment needs. We streamline your operations, mitigate legal risks, and remove the burden of dealing with multiple service providers. This centralised approach enhances operational efficiency, allowing you to concentrate your valuable time, finances, and manpower on what matters—scaling your business and staying ahead of the competition.

Key Advantages of Opting for Express Global Employment

Advantage Detailed Description
Legal Compliance Ensures meticulous adherence to local employment tax and labour laws, reducing the risk of legal complications and fines.
Risk Mitigation Employ advanced strategies to proactively identify and manage potential triggers for Permanent Establishment and Employee Misclassification, shielding your company from unexpected liabilities.
Efficient Onboarding Streamlines the recruitment, orientation, and integration of global talent, reducing time-to-productivity for new hires.
Tax Efficiency Utilises a centralised global payroll management approach, optimising tax withholdings, social security contributions, and employee benefits.
Employee Benefits Administers a wide array of locally-tailored benefit plans, from healthcare to retirement schemes, enhancing employee satisfaction and retention.
Unified Payroll Provides a simplified, centralised approach to global payroll management, allowing seamless salary payments and tax compliance across multiple jurisdictions.

Express Global Employment: Your Ultimate Guide to Navigating HR Compliance in Hong Kong

Navigating the employment landscape in Hong Kong requires a keen understanding of the types of employment agreements available and the specific obligations they entail. Let’s delve into the essential components of each contract type so you’re well-prepared for a compliant and effective hiring process.

Employment Agreements in Hong Kong

Permanent employment agreement

Before commencement of employment, an employer must clearly inform the employee of certain essential terms and conditions of the employment. These include:

  • Wages and, if applicable, the manner of calculation.
  • Wage period and thus when the wages applicable to the period will be paid.
  • Length of prior notice that must be given to terminate the employment contract, in the absence of an agreed period, the statutory notice period will apply.
  • If the employee is entitled to an end-of-year payment (commonly called 13th-month pay or Chinese New Year bonus) or a proportion thereof when it must be paid.

Casual employment contract

Casual employees refer to employees an employer employs on a day-to-day basis or for a fixed period of less than 60 days at the time of enumeration. Casual employees are entitled to all the rights and benefits under the Employment Ordinance. Statutory Minimum Wage (SMW)applies to casual employees.

Fixed-term contract 

Fixed-term employment contracts are permissible, and there is no restriction on the minimum or maximum duration of those contracts. However, every contract where the employee is employed for at least 18 hours per week for more than one month will be deemed a one-month contract, renewable from month to month, unless there is an express term in the contract that provides for the contrary.

Employment Termination and Severance Pay (Dismissal)

The employee may terminate an employment contract by giving the other party due notice or payment in lieu of notice. An employee may terminate his/her employment without notice or payment of wages in lieu of notice to the employer (but with compensation in the form of severance payment and long service payment, where applicable) if the employee:

  • Reasonably fears the physical danger to himself/herself by violence or disease during employment.
  • Is subjected to ill-treatment by the employer.
  • Has been employed for not less than five years, and he/she is certified by a registered medical practitioner as being permanently unfit for the type of work in which he/she is engaged.

An employer can terminate a employment contract at any time by notice or by payment in lieu of notice. Dismissal generally means summary dismissal where no notice (or payment in lieu of notice), severance compensation, or long service payment is required. Under the Employment Ordinance, an employer may exercise its right of summary dismissal if the employee has committed any of the following acts or conduct:

  • Willful disobedience of a lawful and reasonable order.
  • Misconduct inconsistent with the due and faithful discharge of duties.
  • Fraud or dishonesty.
  • Habitual neglect of duties.

Dismissals in Hong Kong

The labour law in Hong Kong prohibits an employer from dismissing an employee in the following circumstances:

  • The employee is pregnant or is on statutory maternity leave.
  • The employee is on statutory sick leave.
  • The employee has been injured at work, and compensation under the Employees’ Compensation Ordinance is pending unless the Commission for Labour’s consent to the dismissal has been obtained.

In addition, it is unlawful to dismiss an employee for any of the following reasons:

  • The employee is a trade union member or officer or participates in any trade union activity (including any strike).
  • The employee has done or is required to do jury service.
  • The employee is of a certain gender, is pregnant, has a particular marital status, is of a particular race, has family responsibilities or is disabled.

Notice Period in Hong Kong

During Probation Period

  • Within the first month: not required
  • After the first month, the contract makes provision for the required length of notice: as per the agreement.
  • After the first month, where the contract doesn’t make provision: not less than 7 days’ notice.

For continuous contracts (after the probation period)

  • Where the contract makes provision: as per agreement, no less than 7 days.
  • Where the contract doesn’t make provision: not less than 1 month.

Severance Payments in Hong Kong

An employee made redundant after being employed continuously for at least two years will be entitled to a severance payment. The amount is calculated by multiplying two-thirds of the employee’s last month’s wages and the period of continuous employment (in years, including any fraction of a year).

Employee Benefits and Contributions

Mandatory benefits required by law to be provided by an employer

Public holidays entitlement, sickness allowance, annual leave, maternity and paternity leave, employees are also entitled to compulsory employee compensation insurance to cover work injury, Mandatory Provident Fund, and termination payments, including severance and long service payments.

Probationary Period in Hong Kong

Probationary periods are allowed, and they are common. There is no restriction on the length of a probationary period, and the norm is three months. Under the Employment Ordinance, during the first month of the probation period, the employer or the employee may terminate the employment contract without giving notice. From the second month of the probation period, the party terminating the contract must provide a minimum of seven days’ notice (or a longer notice period as agreed by the parties).

Overtime

The Employment law does not specifically provide for the obligation to pay overtime as the work hours can be agreed upon. Thus, there is also no minimum rate of overtime payment. However, overtime payments, if payable, are considered part of wages. Accordingly, all statutory provisions for wages also apply to overtime payments. Employers are not prohibited from specifying categories of employees that are entitled to overtime pay and the method of calculating overtime pay in the employment agreement.

Hong Kong encourages freedom of contract; one factor of its success is its hardworking labour force. There are no specific regulations on the hours of work enacted so far, except for young employees between the ages of 15 and 17; the maximum working hours is eight hours a day and 48 hours a week, and there are statutory provisions for minimum holidays. Every employee the same employer has employed under a continuous contract must be granted no less than one rest day every seven days.

Annual Leave in Hong Kong

The Employment Ordinance governs employees’ rights to annual leave. Employees are entitled to seven days paid annual leave after serving every 12 months under a continuous contract. An employee’s entitlement to paid annual leave varies depending on his or her length of employment.

Sick Leave in Hong Kong

For the first 12 months of employment, the employee accumulates two paid sick leave days at the end of each completed month. Each month thereafter, the employee accumulates four paid sick leave days at the end of each completed month; for employees employed under a continuous contract, up to 120 paid sick leave days can be accumulated.

Paid sick leave days are divided into two categories: category 1 being the first 36 days accumulated and category 2 being the subsequent 84 days. Paid sick leave taken under Category 1 requires a medical certificate issued by a registered medical practitioner, Chinese medicine practitioner or a registered dentist. Paid sick leave taken under category 2 requires a medical certificate issued by a registered medical practitioner, a registered Chinese medicine practitioner or a registered dentist attending the employee as an outpatient or inpatient in a hospital.

An employee is entitled to paid sick leave days when:

  • The employee has accumulated the number of paid sick leave days taken.
  • The sick leave taken is not less than four consecutive days.
  • An appropriate medical certificate supports the sick leave.

Parental Leaves in Hong Kong

Maternity leave

Female employees under a continuous employment contract for not less than 40 weeks immediately before the commencement of scheduled maternity leave are entitled to paid maternity leave for 10 weeks. The daily rate of maternity leave pay is equal to four-fifths of the average daily wages earned by an employee in the 12-month period preceding the first day of the maternity leave.

Paternity leave

A male employee is entitled to five days’ paternity leave for each confinement of his spouse or partner if he is the father of a new-born child or a father-to-be, has been employed under a continuous employment contract for not less than 40 weeks immediately before the day of paternity leave and has given the required notification to the employer. The daily rate of paternity leave pay is equivalent to four-fifths of the average daily wages earned by an employee in the 12-month period preceding the first day of paternity leave.

A male employee’s entitlement to statutory paternity leave for five days will remain unchanged under the Amendment Ordinance. Still, the period he can take his paternity leave will be extended. Currently, male employees are entitled to take paternity leave from four weeks before the expected delivery date until ten weeks after the actual date of delivery. This will be extended to 14 weeks to align with the extended period of statutory maternity leave.

Express Global Employment can help you fast-track your possibilities of entering and expanding your business in Hong Kong by providing you with Global Employer of Record services. Our global employment solutions will enable you to jumpstart your global operations almost immediately, cost-effectively and compliantly without you having to set up a legal entity in Hong Kong.

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