11 things employers need to know about Hong Kong labor and employment laws [2025]

From understanding the basic tenets of the Employment Ordinance and the Minimum Wage Ordinance to knowing the ins and outs of termination procedures and privacy laws, every employer needs to be well-versed in the legal landscape. This guide provides key points about Hong Kong's labor and employment laws, providing valuable insights for employers.

1. Misclassifying employees can cost you

In Hong Kong, there's a legal distinction (in terms of conditions of employment) between employees and independent contractors, a differentiation that has significant legal and financial implications. Misclassifying an employee as an independent contractor could be seen as an attempt to bypass obligations such as making Mandatory Provident Fund (MPF) contributions or providing a proper contract of employment.

2. Non-compliance with the minimum wage is costly

In an effort to protect employees from unreasonably low wages, Hong Kong implemented the Statutory Minimum Wage (SMW) in 2011. The rate, which is reviewed at least once every two years, stands at HKD 42.1 per hour as of May 1, 2025. Businesses failing to comply with this standard can face legal action, hefty fines, and damage to their reputation. Employers should also remember that wage calculations must include all remuneration, allowances, and benefits, ensuring fair compensation for their employees.

3. Non-compliance with contractual terms and employment conditions can lead to legal troubles

In Hong Kong, the employment contract or contract of employment is a key legal document that outlines the rights, responsibilities, and obligations of both the employer and the employee. This contract lays out conditions of employment like the wage period, working hours, rest periods, leave, and termination terms. A clear understanding of these contractual terms is essential to ensure adherence to Hong Kong’s labor laws. Non-compliance or breach of these terms can lead to legal action.

4. Be transparent about working hours

While there are no specific laws in Hong Kong governing standard working hours for adults (those aged 15-18 years old working in industrial settings are limited to an 8-hour workday and a 48-hour workweek), it's important to establish clear expectations from the outset to avoid potential disputes. This includes detailing expected working hours in the employment contract and ensuring fair compensation for any overtime. Transparency is key to building trust and maintaining a healthy employment relationship.

5. Non-compliance with Mandatory Provident Fund (MPF) requirements can be penalized

The MPF is a compulsory savings scheme for the retirement of residents in Hong Kong. Both employers and employees, barring a few exemptions, are required to make monthly contributions based on the employee's relevant income.

6. Ensure occupational safety and health

Employers in Hong Kong are mandated to safeguard the health and safety of their employees at work, as outlined in the Occupational Safety and Health Ordinance. Non-compliance can lead to legal action and substantial penalties. Measures include providing safe machinery and equipment, offering necessary training, and conducting regular risk assessments.

7. Understand the terms of termination and expiry of contracts

The rules for termination of employment contracts in Hong Kong are clear. Unless otherwise stated in the contract of employment, either party can terminate a continuous contract by giving the other party notice or payment in lieu of notice. For a fixed-term contract, the expiry occurs naturally at the end of the term. Summary dismissal is immediate termination in response to severe misconduct and does not require notice or payment in lieu of notice.

8. Non-adherence to maternity and paternity leave provisions can result in penalties

Hong Kong law ensures provisions for maternity and paternity leave for employees, allowing them time off to welcome a new child into their family. These provisions include 14 weeks of maternity leave pay and five days of paternity leave. As of 2022, nursing mothers are entitled to breastfeeding breaks during working hours. Violation of these rights can lead to penalties, including fines and legal action. Employers must familiarize themselves with these provisions and ensure that their policies reflect these rights.

9. Ignoring sick leave laws can lead to legal action

Sick leave and sickness allowance are two critical components of employee welfare as defined in the Employment Ordinance of Hong Kong. Employers are legally bound to grant sick leave and pay a sickness allowance under certain conditions. Ignoring these laws can lead to legal complications, fines, and a deteriorating relationship with the workforce.

10. Adherence to privacy laws is essential

With the growing digitization of employee records, adherence to privacy laws is essential for employers in Hong Kong. The Personal Data (Privacy) Ordinance (PDPO) sets out the rules for data protection. Employers need to ensure that the collection, use, and storage of personal data complies with the requirements under the PDPO.

11. Violating anti-discrimination laws can be costly

Hong Kong has enacted strict laws to prevent discrimination in the workplace. These include the Sex Discrimination Ordinance, Disability Discrimination Ordinance, Family Status Discrimination Ordinance, and Race Discrimination Ordinance. Violations could involve discrimination based on marital status, gender (including pregnant and breastfeeding women), and family status (including family members such as children or parents). Any violation of these laws can lead to legal action and heavy fines. Employers need to actively foster a diverse and inclusive environment and take swift action to address any form of discrimination.

The Labour Department ensures strict compliance with these MPF regulations, and employers failing to make the necessary contributions can find themselves facing severe financial penalties and potential legal action. Businesses should regularly check their MPF obligations and ensure timely and accurate contributions.

As defined by the Labour Department, such misclassification can result in legal complications, penalties, and fines. Employers should take careful steps in classifying their workforce, ensuring that all contracts clearly define the nature of the employment relationship and that they comply with all respective rules and regulations.

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