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Compliance
Published:
January 12, 2026
Last updated:
January 12, 2026
For businesses thinking of expanding into Hong Kong, understanding the territory's employment law framework is essential for compliant hiring and payroll management. Hong Kong represents a critical APAC financial hub with robust business infrastructure, common law legal system, and strategic positioning as gateway to Greater China.
Organizations managing multiple employees across several APAC markets benefit from Hong Kong's relatively employer-flexible framework compared to jurisdictions with stronger employee protections (Philippines, mainland China, Japan). However, specific areas require attention: Mandatory Provident Fund (MPF) contributions, continuous employment thresholds, and proper termination procedures.
Hong Kong's employment system is governed by the Employment Ordinance (Cap. 57), covering employment contracts, wages, working hours, statutory holidays, leave, termination, and severance/long service payments.
Key supporting legislation:
Regulatory bodies: Labour Department (enforcement, inspections, dispute mediation), MPFA (MPF regulation), Labour Tribunal (employment claims resolution).
Non-compliance consequences: Many violations constitute criminal offenses with fines ranging from HK$10,000 to HK$350,000 and imprisonment up to 3 years.
Hong Kong permits oral and written contracts—both legally valid. However, written contracts strongly recommended for clarity and dispute prevention.
Key provisions: Job duties, work location, remuneration, working hours, rest days/holidays, probation period, notice periods, termination conditions.
Continuous Employment Threshold: "Continuous employment" status (employed 4+ weeks, working 18+ hours weekly) determines eligibility for statutory benefits including rest days, statutory holidays with pay, annual leave, sickness allowance, severance, and long service payments.
No statutory maximum working hours (unlike mainland China's 8 hours daily/44 weekly limits). Employers and employees negotiate freely, though excessive hours create occupational safety risks and reputational damage.
Rest days: Employees under continuous employment entitled to at least 1 rest day per 7-day period.
Statutory holidays: Hong Kong observes 12 statutory holidays annually including New Year's Day, Lunar New Year (3 days), Ching Ming Festival, Good Friday, Easter Monday, Labour Day, Buddha's Birthday, Dragon Boat Festival, Mid-Autumn Festival, National Day, and Chung Yeung Festival. Employees under continuous employment entitled to paid statutory holidays.
Statutory Minimum Wage: HK$40.00 per hour as of May 1, 2023.
Payment requirements: Wages must be paid at least once monthly within 7 days after end of wage period. Delays constitute criminal offense.
Payslip requirements: Itemized statements showing wages, allowances, bonuses, and deductions (MPF, taxes, authorized deductions).
Wage arrears consequences: Criminal offense with potential fines and imprisonment.
Explore payroll compliance across APAC markets.
MPF is compulsory retirement savings requiring employer and employee contributions.
Coverage: Employees aged 18-64, employed 60+ days.
Contribution rates:
Examples:
Payment deadline: By 10th of each month for previous month. Late payment incurs 5% surcharge plus daily interest.
MPF Offsetting Abolition: Effective June 1, 2025, employers cannot use employer MPF contributions to offset severance/long service payments for post-abolition service—requiring full cash payments in addition to MPF benefits.
Foreign nationals require work visas under General Employment Policy (GEP).
Eligibility: Special skills not readily available locally, bachelor's degree or higher, confirmed employment offer, market-rate remuneration, no adverse records.
Processing: Typically 4-6 weeks. Visa granted for 2-3 years initially, renewable.
Penalties for non-compliance: Fines up to HK$350,000 and imprisonment up to 3 years for employers; deportation and entry bans for foreign employees.
Notice periods:
Payment in lieu permitted.
Summary dismissal: Immediate termination without notice permitted for serious misconduct (willful disobedience, fraud, habitual neglect) after reasonable investigation.
Severance Payment: Employees under continuous employment for 2+ years dismissed due to redundancy:
Long Service Payment: Employees under continuous employment for 5+ years if employment terminates due to death, permanent unfitness, age 65+, resignation at 65+, layoff, or termination (except misconduct/redundancy).
Note: Employee receives either severance OR long service payment (not both). Post-June 2025, no MPF offsetting for post-abolition service.
Learn more about employee termination challenges across APAC.
Labour Department inspections verify wage compliance, statutory entitlements, MPF enrollment, foreign worker authorization, and occupational safety.
Record retention: Maintain employment records for minimum 7 years.
Labour Tribunal: Handles employment-related monetary claims through simplified proceedings. Common claims include unpaid wages, statutory entitlements, severance/long service payments, and wrongful dismissal compensation.
No statutory maximum working hours: Unlike mainland China (8 daily/44 weekly) or Philippines (8 daily).
Lower social security contributions: MPF (10% total, capped) vs. Singapore CPF (37%), mainland China (30-37%).
Employer-flexible termination: Simpler than Philippines (strong security of tenure) or mainland China (significant restrictions).
No statutory overtime premiums: Unlike mainland China (150-300%) or Philippines (125-130%).
English acceptability: Contracts and communications can be in English vs. markets requiring local language.
AYP's Employer of Record services provide:
