Hong Kong maintains a simple and laissez-faire labor policy regime with relatively few rules. Nevertheless, Hong Kong authorities are vocal in their official support for workers rights and their importance in the context of a robust Hong Kong economy. Additionally, the few rules that do exist are rigorously enforced. Businesses navigating Hong Kong’s labor laws should be aware that nearly all labor rules are spelled out in the Employment Ordinance and are enforced by the Labor Department. While the Labor Department regulates issues like rest days, ensures statutory holidays and annual leave, Hong Kong’s Employment Ordinance does not provide statutory requirements for work hours or overtime.
It is generally accepted that the lax regulatory system contributes to the operational flexibility of businesses as well as the efficiency and fluidity, of the Hong Kong labor market. Though controversial within Hong Kong, this logic has prevented the adoption of a statutory standard for working hours and overtime. In 2010, the Hong Kong government underwent some minimal progress toward developing a working hours system to protect employees. Nonetheless, there is still no statutory maximum number of working hours specified for different types of employees. There is also no overtime maximum. The negotiation of working hours, overtime, and overtime payment terms are left to the employer and employee.
Labor Contract: Before the contract begins, employers and employees must negotiate the work hours and overtime conditions of the position and write them clearly into the contract. Employers are obligated to obey the terms of the contract or will be subject to a fine issued by the Labor Department.
There is no statutory standard working hour system, as well as no statutory maximum number of hours. However, despite, not stipulating requirements for work hours or overtime, the Employment Ordinance sets clear requirements for rest days, wage protection, maternity protection, protection against anti-union discrimination, statutory paid holidays, annual leave, sick leave, and severance payment. Additionally, working hours are regulated for people under 18 years of age and for workers in several professions.
As the Hong Kong Labor Department’s policy puts decision-making on these matters in the hands of the employers and employees, most companies consider the market in determining the best approach for negotiating terms of their labor contracts. In 2011, the average number of working hours in a week was 47 (median; 46). According to a 2011 study conducted by the Labor Department, about one-quarter of Hong Kong employees worked overtime, as defined by their contract. About one-half of these employees were compensated for their overtime hours. According to the same study, lower-skilled and lower-paid workers in labor-intensive industries are much more likely to be paid for their overtime work. High-skilled workers in high-value added industries were much less likely to be compensated for overtime.
The law governing working hours for minors is the clear exception to the laissez-faire attitude towards working hours in Hong Kong. An employer convicted of violating any of these rules will face a fine between USD 10,000 and USD 50,000. The system provides different working hour rules for young persons between the age of 15 and 18, children between 13 and 15 years of age, and children under 13 years of age.
Security personnel must not work more than 372 hours per month and must not work more than 12 hours in a day.
Hong Kong labor law does not set specific requirements regarding overtime work including any requirements to pay for overtime work. However, the law states that if the employment contract provides payment for overtime work, the employer is legally obligated to provide such wages and will be subject to a fine for withholding wages. Overtime payment is treated the same as regular wages and is protected from defaults. Additionally, when determining entitlements, any overtime pay offered should be included in the calculation.
While many businesses see an advantage in Hong Kong’s remarkably laissez-faire rules covering working hours and overtime, the highly-competitive market ensures that businesses must offer fair working hour terms and overtime conditions or else they will be unable to find and maintain high-quality help.
Operational Effectiveness and Flexibility Without statutory standard working hours, businesses may more easily adjust to production needs. This helps to foster a large base of small and medium sized enterprises, which make up 98% of Hong Kong’s economy.