As Hong Kong gears up for significant shifts in its employment laws, businesses operating in the region, including Employer of Record (EOR) companies, must prepare to navigate these changes effectively. Here’s an in-depth look at 3 critical developments and their implications for employers and employees alike.
1. Revised Continuous Contract Requirements: From “418” to “468”
Under the current Employment Ordinance (EO), employees must work for the same employer for at least 18 hours per week over four consecutive weeks (“418” rule) to qualify as being under a continuous contract. This status entitles employees to benefits such as paid annual leave, statutory holidays, sickness allowances, and severance payments.
However, this framework is set to change with the introduction of the “468” rule, which lowers the threshold to an aggregate of 68 hours over four consecutive weeks. This amendment aims to provide greater protection to part-time, casual, and substitute workers who previously fell outside the scope of continuous contract benefits.
Implications for Employers:
Expanded Obligations: A larger portion of the workforce will now qualify for statutory benefits, increasing operational costs for businesses.
Compliance Challenges: Employers will need to reassess their workforce structures, employment contracts, and working hours records to ensure compliance.
Action Steps: Begin reviewing employment arrangements and prepare to implement robust tracking systems to monitor hours worked and maintain accurate records.
2. Enhanced Cross-Boundary Data Protection Regulations
With the introduction of new standards for data transfers within the Greater Bay Area, Hong Kong is reinforcing its commitment to data privacy and compliance. The Greater Bay Area Standard Contract (GBA SCC) sets stringent requirements for the cross-border flow of personal information, aiming to align data protection practices across jurisdictions.
Implications for Employers:
Increased Scrutiny: Companies handling cross-border data, such as employee records, must ensure compliance with the new standards.
Operational Adjustments: Employers will need to implement or upgrade data protection policies, processes, and infrastructure to manage personal data securely.
Action Steps: Conduct a data protection audit and ensure alignment with the GBA SCC requirements. Providing employees and clients with clear data privacy policies can further enhance trust.
3. Facilitating Foreign Company Re-Domiciliation
To attract more international businesses, Hong Kong is enacting legislation to allow foreign companies to redomicile within the region. This moves underscores Hong Kong’s commitment to maintaining its status as a global business hub.
Implications for Employers:
Global Talent Strategy: Companies relocating to Hong Kong may require support in navigating local employment laws and integrating into the regional workforce.
Opportunities for EOR Services: EOR companies can play a crucial role in helping foreign firms manage employment obligations, ensuring compliance with local regulations.
Action Steps: Develop tailored services to assist redomiciling companies, including onboarding, payroll management, and regulatory compliance.
Preparing for the Future
These legislative updates represent opportunities for businesses to adapt and thrive in Hong Kong’s dynamic employment landscape.
At Quadlux, we are committed to supporting our clients through these transitions. Let’s navigate the future together. Reach out to us support@quadlux.net to learn more about how these changes could impact your business and how Quadlux can support you.
Visit www.quadlux.net today!
