Hong Kong has strict compensation and benefits rules as a part of its Employment Ordinance. To stay compliant, you need to keep up-to-date on any changes to the laws, understand how to disperse benefits, and make sure you are offering every benefit guaranteed in Hong Kong.
Hong Kong Compensation Laws
Hong Kong compensation laws depend on your employee’s category. While regulations do not distinguish between full-time or part-time employees or independent contractors, an employee who has worked for more than four weeks falls in the continuous employment category and is subject to separate laws.
Employee compensation is due at the end of the last day of every wage period. You need to pay employees on or before that due date, or no later than seven days afterward.
Although it is not required, it is best practice to offer a 13th-month bonus that coincides with the Chinese New Year. Employers can also include bonuses, commissions, awards, and other compensation as part of employment contracts.
Guaranteed Benefits in Hong Kong
All employees have access to a public health care system where insurance is not required, and there are no pay deductions. However, the public system often has long waits and offers few English-speaking providers, so many employers provide supplemental health benefits and life insurance. A good rule of thumb is to budget about 20% for additional benefits on top of the gross salary you offer employees.
Hong Kong employees are guaranteed seven vacation days a year after working for your company for a year or more. They get an extra day every year until they reach 14 days after nine years of service. Hong Kong benefits law states that “use it or lose it” policies regarding vacation days are not allowed. However, employees can choose to receive payment instead of any vacation over ten days.
Hong Kong Benefit Management
As an employer, Hong Kong benefit management is essential to give employees what they are entitled to and stay compliant with local laws. It’s important to understand every law or hire a local lawyer if you are not clear on something. You are responsible for providing all guaranteed benefits and sourcing any supplemental benefits such as health insurance.
On your own, Hong Kong benefit management involves a significant amount of time, money, and travel. You must sign contracts for any supplemental benefits and may often travel to Hong Kong to seal the deal. You can also work with a Hong Kong benefit outsourcing company that will choose and manage benefits for your employees.
Benefits and Compensation Restrictions
You’ll need to stay aware of certain benefits and compensation restrictions in Hong Kong. For example, employees are guaranteed 12 statutory holidays. Some employers also offer five additional holidays, although these are not mandated. If you require your employees to work on one of the statutory holidays, you must choose an alternative holiday within 60 days of that holiday.
While Hong Kong doesn’t specify a certain minimum wage, you do need to make sure every employee is paid fairly. Instead of trying to keep up with Hong Kong compensation laws, you can work with a global PEO such as Globalization Partners. We help manage compensation and benefits for your employees while taking the liability off your shoulders. Contact us today to learn more.