Hong Kong: Proposed relaxation to the continuous employment ‘418’ rule

What’s new?

Hong Kong’s Labour Department has proposed changes to the ‘418 rule’ which determines ‘continuous employment’, specifically the method by which “qualifying hours” are calculated. This is aimed at increasing the number of employees who are under a continuous contract, and therefore are entitled to more benefits such as (amongst others) statutory holiday pay, paid annual leave, sickness allowance, severance payment and long service payment.

The bill implementing the proposed changes is still under review and is due to be tabled before the Legislative Council soon.

What are the key changes?

The ‘418 rule’ currently states that an employee who has worked for the same employer for a consecutive period of four or more weeks and worked at least 18 hours per week, is under a continuous contact of employment.

The proposed change is that employees’ qualifying hours will be calculated using their total hours across the aforementioned period, instead of on a week-by-week basis, and the total hours threshold will be decreased to 68 hours. Therefore, if the bill is passed, an employee would be under a continuous contact of employment where they have worked at least 68 hours for the same employer over a four-week consecutive period, and will therefore entitled to the benefits mentioned above.

So, what should employers do now?

Employers should monitor the proposed changes to the ‘418’ rule and consider how this may impact any employees and their benefit entitlements. If you need any support with this, or would like any further information, please get in touch with a member of the MDR ONE team.

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