If your business in
Hong Kong needs to employ local staff, then
it has to be done in accordance with the rules
and regulations of the Employment
Ordinance and Employees'
Compensation Ordinance. Being an employer,
you should arrange Mandatory
Provident Fund Schemes for your staff
under the law. Moreover, your company has
to file an annual return of remuneration of
employees for tax purposes and pay profits
tax on the profits earned from running a business
in compliance with Hong Kong's Taxation
laws. To promote a productive working environment,
you should also maintain a harmonious labour
relations with your staff.
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Employment
Ordinance |
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You have
to ensure your employment of staff in
Hong Kong complies with the Employment
Ordinance. The Ordinance is the major
piece of legislation governing conditions
of employment in Hong Kong. Basically,
the Ordinance applies to all employees
with few exceptions like crews and apprentices.
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All employees
covered by the Employment Ordinance, irrespective
of their hours of work, are entitled to
basic protection under the Ordinance including
payment of wages, restrictions on wage
deductions and the granting of statutory
holidays. |
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Employees
who are employed under a continuous contract
(working continuously for the same employer
for four weeks or more, with at least
18 hours in each week) are further entitled
to such benefits as rest days, paid annual
leave, sickness allowance, severance payment
and long service payment, etc. |
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There are
no minimum wage rates in Hong Kong. Wages
can be calculated by the hour, day, month
or piece. |
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To obtain
more information on the Employment Ordinance
and details of wage protection, rest days,
statutory holidays, paid annual leave
during employment, sickness allowance,
maternity protection, end of year payment,
termination of contract of employment,
severance payment, long service payment
and employment protection, you can visit
the websites of the Labour Department
and Labour Relation Promotion Resource
Centre. Or you can refer to 'A Concise
Guide to the Employment Ordinance' at
http://www.labour.gov.hk/eng/public/wcp/EOConciseGuide/index.htm. |
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You can
also download a sample employment contract
from the Labour Department at http://www.labour.gov.hk/eng/public/emp_cont/index.htm |
Sources: Labour Department |
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Employees'
Compensation Ordinance |
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As an employer,
it is your responsibility to compensate
your employees in cases of work injuries
or fatalities. The Employees' Compensation
Ordinance (ECO) establishes a no-fault,
non-contributory employee compensation
system under which individual employers
are liable to pay compensation in respect
of work-related injuries or fatalities
(including occupational diseases). The
ECO applies to all employers. |
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You are
obliged to comply with the Employees'
Compulsory Insurance, and should :
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secure
a valid insurance policy to cover
your liabilities under the ECO and
at common law for injuries or deaths
sustained by employees at work; |
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display
at the place of employment a notice
of insurance; |
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not
deduct from the earnings of your
employees to defray the cost of
taking out insurance; |
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not
make any agreement with your employee
which removes or reduces your liability
to pay compensation under the Ordinance; |
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not
provide any false or misleading
information in the notice of insurance. |
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Regarding
the payment of compensation, you should
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pay
an injured employee on his/her normal
pay-days periodical payments at
the rate of four-fifths of his/her
normal earnings during the period
of sick leave; |
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pay
medical expenses, subject to a daily
maximum according to the Third Schedule
of the Ordinance, to an injured
employee for medical treatments
received unless you have provided
adequate free medical treatment
to the employee; |
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pay
compensation to an injured employee
within 21 days after the Commissioner
for Labour has determined the amount
of compensation payable and issued
a certificate; |
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not
dismiss an injured employee unless
the relevant certificate has been
issued or the compensation claim
has been settled with the employee. |
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In
the event of any work accident or
occupational disease, you should
notify the Commissioner for Labour
using specified forms within the
notice period.
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For
more details, you can visit the
websites of the Labour Department
and Labour Relation Promotion Resource
Centre or refer to 'A Concise Guide
to the Employees' Compensation Ordinance'
at http://www.labour.gov.hk/eng/public/ecd/eco/content.htm.
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Sources: Labour Department |
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Mandatory
Provident Fund Scheme |
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The Hong
Kong Special Administrative Region has
implemented the Mandatory Provident Fund
(MPF) since December 2000 to provide basic
retirement protection to all employees
and self-employed persons. |
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It is compulsory
for all employers to enrol in the MPF
for their employees. Except for special
exemptions, all employees aged between
18 and 65 must participate in the MPF.
Employees mean all full-time and part-time
employees who are employed under a continuous
contract for at least 60 days. |
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For more
details concerning the MPF, please visit
our Bank's website: /hsb/eng/onl/emp/impf/index.html |
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Taxation
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Any companies
carrying on any trade, profession, or
business in Hong Kong are chargeable to
tax on all profits at a rate of 17.5%.
The Inland Revenue Department is responsible
for all taxation issues in Hong Kong. |
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Hong Kong
adopts a territorial source principle
of taxation, and therefore only your profits
and incomes which have a source in Hong
Kong are taxable here. |
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Generally,
all your outgoings and expenses are permitted
as deductions, except the following: domestic
or private expenses, expenditure of a
capital nature, expenses derived from
the purpose of producing the profits,
depreciation of plants or machineries
and the related capital allowance, losses
brought forward from the previous year
of assessment, etc. |
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You are
required to submit the Profits Tax Return
to the Inland Revenue Department annually. |
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Normally,
in April every year, the Inland Revenue
Department will issue an Annual Return
of Remuneration for Employees to employers.
You have to complete and return the form
to the Department within one month from
the date of issue. |
Sources: Inland Revenue
Department |
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Labour
Relations |
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In order
to diagnose specific problem faced by
different industries, the Workplace Consultation
Promotion Unit (WCPU) of the Labour Department
has set up various sector-specific tripartite
committees to facilitate direct dialogue
and collaboration of employment-related
issues among employers, employee organisations
and the government. The tripartite cooperation
helps promote voluntary negotiation, consultation
and effective communication between employers
and employees. In addition, the WCPU provides
information and guidance to employers
and employees on labour relations through
publications, Internet and mass media. |
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You can
download useful publications about your
industry at http://www.labour.gov.hk/eng/public/content2_3.htm
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Source: Labour Department |
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