Employment relationships in Hong Kong are governed principally by the Employment Ordinance (Cap. 57), supported by the Mandatory Provident Fund Schemes Ordinance (Cap. 485), the Minimum Wage Ordinance (Cap. 608), the Employees' Compensation Ordinance (Cap. 282), and the anti-discrimination ordinances. The Employment Ordinance applies to virtually all employees, whether local or foreign, working under a contract of employment.

The Ordinance sets minimum standards that an employer cannot contract out of, covering areas such as:

• Payment of wages and restrictions on wage deductions
• Rest days, statutory holidays, and paid annual leave
• Sickness allowance and statutory maternity/paternity leave
• Termination, notice, and severance or long service payment

Employers may always offer terms more favourable than the statutory minimum, but any term that seeks to reduce an employee's entitlements below the Ordinance is void. Breaches can lead to prosecution, fines, and orders to pay outstanding sums.

A key concept under the Employment Ordinance is the continuous contract. All employees enjoy basic protections (such as payment of wages and restrictions on deductions), but the fuller range of benefits — paid annual leave, statutory holiday pay, sickness allowance, maternity and paternity leave, severance pay, and long service payment — is reserved for employees employed under a continuous contract.

Historically, an employee was under a continuous contract when they worked for the same employer for 4 or more weeks, with at least 18 hours in each week — the well-known "418 rule". With effect from 18 January 2026, the Employment (Amendment) Ordinance 2025 replaced this with the "468 rule": an employee is now under a continuous contract if they work for the same employer for 4 or more weeks with an aggregate of at least 68 working hours over that period. The change is designed to bring more part-time and irregular-hours staff within full statutory protection.

Different benefits carry their own qualifying periods once the continuous-contract test is met:

Hong Kong does not set a general statutory maximum on weekly working hours for most adult employees, and there is no universal statutory overtime premium. Standard hours are a matter for the employment contract, and overtime pay (if any) follows what the parties have agreed. Statutory working-hour limits apply only to specific groups, such as young persons employed in industrial undertakings.

What the Employment Ordinance does guarantee is rest days. An employee employed under a continuous contract is entitled to not less than one rest day in every period of seven days. Rest days are appointed by the employer and may be regular or irregular, but the employee must be informed. Whether rest days are paid depends on the contract; if an employee is required to work on a rest day, a substitute rest day must generally be arranged.

Hong Kong distinguishes between statutory holidays (granted to all employees under the Employment Ordinance) and general holidays (the "bank holidays" observed by banks, government offices, and many white-collar employers). The number of statutory holidays is being increased in phases to align it with the 17 general holidays.

The Employment Ordinance guarantees sickness allowance and paid family-related leave for eligible employees. Employers may offer more generous terms, but not less.

Wages must be paid to an employee as soon as practicable, and in any case within 7 days after the end of the wage period. Late payment can attract interest and, in serious cases, prosecution. Hong Kong also has a Statutory Minimum Wage under the Minimum Wage Ordinance, which is reviewed periodically — employers should confirm the current hourly rate before setting pay.

Since the 2007 amendment (widely called the "713 rule", after section 7 of Cap. 57 as amended), most statutory payments must be calculated using the employee's average daily wages over the 12 months immediately before the relevant event (excluding periods and sums that must be disregarded, such as unpaid leave). This 12-month averaging applies to:

• Holiday pay and annual leave pay
• Sickness allowance
• Maternity and paternity leave pay
• End-of-year payment
• Payment in lieu of notice

Because bonuses, allowances, and overtime can move the average, employers should keep careful wage records to compute these entitlements correctly.

Either party may end a continuous contract by giving notice or by making a payment in lieu of notice. The required notice depends on the contract:

• During the first month of probation, either side may terminate without notice.
• After the first month of probation, the notice agreed in the contract applies, but not less than 7 days.
• For a monthly-renewable contract that is silent on notice, the default is not less than one month.

Payment in lieu of notice is calculated using the 713 average-daily-wages method. Certain dismissals are prohibited — for example, dismissing an employee on paid sick leave, a pregnant employee who has served a pregnancy notice, or for giving evidence in labour proceedings. Where an employer summarily dismisses for serious misconduct, no notice or payment in lieu is required, but the threshold is high and should be documented.

Hong Kong provides two mutually exclusive end-of-employment payments. Severance payment is due to an employee with at least 24 months' continuous service who is dismissed by reason of redundancy or lay-off. Long service payment is due to an employee with at least 5 years' continuous service whose employment ends in other qualifying circumstances (for example, dismissal not due to serious misconduct or redundancy, or death). An employee cannot receive both for the same period of service.

Both are calculated on the same formula: (last full month's wages × 2/3) × reckonable years of service, with the monthly wages figure capped at HKD 22,500 (so the amount per year is capped at HKD 15,000) and the total payment capped at HKD 390,000. Employees may elect to use their actual average wages instead of the monthly figure.

Hiring in Hong Kong means working within the Employment Ordinance and keeping pace with recent reforms — the move from the 418 to the 468 continuous-contract rule, the phased rise in statutory holidays toward 17 days by 2030, and the 2025 abolition of the MPF offsetting arrangement. Meeting the statutory minimums on wages, rest days, leave, sickness allowance, and end-of-employment payments builds a compliant, resilient foundation for your team. Consider working with an HR partner experienced in Hong Kong labour law to keep your hiring smooth and compliant.

Book a call with us today to learn how we can support your hiring needs in Hong Kong.