Hiring in Hong Kong: Employment Ordinance Essentials for Employers in 2026

The 468 rule: who counts as a continuous-contract employee

The Employment Ordinance (Cap. 57) protects every employee on basics such as timely wages and the statutory holidays themselves. The valuable benefits need a continuous contract: rest days, holiday pay, paid annual leave, sickness allowance, maternity and paternity pay, and severance and long service payments. Until 17 January 2026 the “418 rule” applied: four weeks with the same employer and at least 18 hours in every week, so one short week broke the chain.

The Employment (Amendment) Ordinance 2025 replaced it from 18 January 2026. According to the Labour Department, an employee now has a continuous contract after four weeks or more with the same employer working at least 17 hours each week. A shorter week still counts if it and the three weeks before it total 68 hours or more. In a dispute, the employer must prove that a contract is not continuous. The qualifying periods for each benefit are unchanged.

Payroll therefore needs a rolling four-week total. The minimum wage does not need a continuous contract: HK$43.1 an hour from 1 May 2026 covers employees under the Ordinance except live-in domestic workers and exempt student interns and work experience students. For employees earning less than HK$17,600 a month, employers must also record the total hours worked in each wage period.

Pay, holidays and leave in 2026

Wages must be paid within seven days after the end of the wage period, and continuous-contract employees get at least one rest day in every seven. There are 15 statutory holidays in 2026: Easter Monday (6 April 2026) is new from 2026, Good Friday follows in 2028 and the day following Good Friday in 2030, making 17. All employees get the holidays; holiday pay needs three months under a continuous contract.

Paid annual leave is earned for each 12 months of continuous employment: 7 days for each of the first two years, rising by a day a year to 14 days from the ninth year. Paid sickness days accrue at two a month in the first year and four a month after that, up to 120. Sickness allowance, at four-fifths of average daily wages, is paid for at least four consecutive days of certified sick leave, with limited pregnancy-related exceptions.

Maternity leave is 14 continuous weeks, paid at four-fifths of average daily wages where the employee has at least 40 weeks under a continuous contract before it starts. Pay for the 11th to 14th weeks is capped at HK$80,000, and the employer can claim it back from the Government. Fathers get 5 days’ paternity leave for each confinement, paid at the same rate after 40 weeks under a continuous contract.

Ending employment and insuring your staff

Severance payment is due after 24 months’ continuous employment where the employee is dismissed by reason of redundancy or laid off. Long service payment needs five years and covers most other dismissals (not summary dismissal), fixed-term contracts that are not renewed, and resignations on health grounds or at 65 or over. Each is two-thirds of a month’s wages, capped at HK$22,500, per year of service: at most HK$15,000 a year and HK$390,000 in total.

Since 1 May 2025, employers cannot use benefits from their mandatory MPF contributions to reduce these payments for service from that date. Earlier service is grandfathered: that portion uses the last full month’s wages before 1 May 2025 and can still be offset, as can benefits from voluntary contributions and contractual gratuities at any time. A 25-year Government subsidy scheme meets part of the cost for eligible employers after they have paid.

Under the Employees’ Compensation Ordinance (Cap. 282), every employer must insure all its employees, full-time or part-time, however short the contract. Cover must be at least HK$100 million per event for up to 200 employees and HK$200 million above that. Failing to insure carries a fine of up to HK$100,000 and two years’ imprisonment. Display the notice of insurance at each workplace, and report work injuries to the Labour Department within 14 days, or 7 days for a death.

Employer checklist for 2026

• Take out employees’ compensation insurance before the first employee starts, and display the notice of insurance at every workplace.
• Pay at least HK$43.1 an hour from 1 May 2026, and record total hours for anyone earning under HK$17,600 a month.
• Track part-time hours over rolling four-week periods; staff who reach 68 hours qualify.
• Load the 2026 statutory holidays, including Easter Monday on 6 April, and plan for Good Friday from 2028.
• Keep each longer-serving employee’s last full month’s wages before 1 May 2025 on file; the grandfathered severance or long service portion depends on it.
• Enrol new staff in an MPF scheme and file Form IR56E with the Inland Revenue Department within three months of each start date.