Hong Kong Employment Contract

Applying for Hong Kong jobs, you will see that staff asked to transfer overseas internally generally get a better terms in their Hong Kong employment contract than an overseas hire applying to join a company based in Hong Kong.

hong-kong-employment-contractMost expat have private healthcare schemes included in their Hong Kong employment contract. As a minimum, yourself and family should be covered by a Hong Kong provider who will reimburse costs properly incurred (e.g. you need a GP to refer you to a Specialist or you can’t reclaim the fee) up to predefined amounts. Some providers will give you a medical card for GP visits, which allows the doctor to bill the provider directly. Comprehensive ‘International’ medical cover and dental cover will not normally be available. As Hong Kong ID card holders you may also access the public healthcare system, which is good although A&E waiting times can be long for non-urgent cases.

Also, refer to our Hong Kong tax page as you should be able to have some of your Hong Kong salaries tax classed as ‘rental reimbursement’ in your Hong Kong employment contract. This will offset some of your salaries tax, subject to certain conditions. Your employer’s HR department should be able to advise further.

Hong Kong Employment Contract Statutory Provisions

The Employment Ordinance covers a range of statutory provisions that may be reflected in your Hong Kong employment contract. Even if not specifically referred to, all the provisions apply to an employment contract under the jurisdiction of the laws of Hong Kong.

  • Wage Protection
  • Rest Days
  • Holidays with Pay
  • Paid Annual Leave
  • Sickness Allowance
  • Maternity Protection
  • Severance Payment
  • Long Service Payment
  • Employment Protection
  • Termination of Employment Contract
  • Protection Against Anti-Union Discrimination

Additionally, there will be Mandatory Provident Fund (MPF) provision in your Hong Kong employment contract, or provision for a similar MPF exempted registered scheme.  An example of this is Occupational Retirement Schemes Ordinance (ORSO).

Both employees and employers contribute to these schemes. The employees MPF fund is released at age 65 or earlier in certain circumstances, e.g. on early retirement at the age 60, permanent departure from Hong Kong, total incapacity or death. Compulsory MPF employee and employer monthly contributions are 5% of monthly pay up to a maximum of HK$1,250.

Transferring to Hong Kong

Transferees may be able to negotiate the following in their Hong Kong employment contract:

  • Limited relocation to Hong Kong and a mechanism for a relocation back to country of origin under some circumstances, e.g. because of restructure, but not following non-performance or after a prolonged period when the employee is deemed to have ‘gone local’ as opposed to being seconded.
  • Enhanced pay or benefits for a defined period.
  • Assistance with short-term or one-off costs associated with the relocation, e.g. contents storage, home flights.

If you are joining a company in Hong Kong from overseas, none of this will be available. Don’t even ask, as it shows a lack of awareness and ‘it’s all about you’ (refer to Applying for Hong Kong jobs).

New hires from overseas

Adjusting to life in Hong Kong will be expensive and external hires and transferred employees should be aware of some of these burdens. For example, you will pay Hong Kong tax retrospectively for your first year and in advance for your second year. Although Hong Kong taxation is relatively low, paying tax for two years at once needs to be budgeted for. Also, you’ll need to find deposits for schools and apartments. See our Hong Kong relocation page for more information on these costs. Most staff have to deal with these costs without company assistance.

Although employers may offer ‘local’ Hong Kong employment contract terms (i.e. the same package offered to a local hire, plus visa sponsorship) the reality is that some relocation costs and short-term financial assistance may be available to cover the immediate costs of relocation. Requesting reimbursement for economy flight costs and a a couple of weeks in a serviced apartment or hotel would be reasonable requests.

This page on the Hong Kong employment contract was contributed by our Guest Editor, Peter Udall.

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