Employee Compensation Law in Hong Kong
Hong Kong is a major financial hub both in Asia and the world; it’s also the de-facto gateway into China at the moment. A short flight away from Tokyo, Seoul and other major Asian destinations, Hong Kong blends the old and the new, East and West and is both a great place to work as well as play.
Whether you’re looking to relocate your employees to this island or open a brand new office here, you’ll need to familiarize yourself with the labour laws of this region.
What Are the Labour Laws in Hong Kong?
Like in most Western countries, Hong Kong requires that employers carry insurance to ensure their employees are compensated for any workplace injuries (injuries arising from their workplace duties). While Common Law applies in these situations, the specific law governing this is called the Employees’ Compensation (EC) Ordinance.
According the EC Ordinance, employers with one or more employee must purchase insurance to compensate employees who suffer bodily injury or death due to accident or disease arising out of their job duties as an employee. These benefits include payments for medical expenses, lost income or death benefits for any surviving dependents, and are paid out on a no-fault basis. This means that benefits are paid to the employee even if the injury occurred due to the employee’s own negligence.
Under this Ordinance, all employees are required to be covered including domestic helpers, seasonal workers, contractors, and even family members employed by the business. Companies with less than 200 employees are required to purchase a minimum accident limit of $100 million HKD. If you have over 200 employees, you are required to purchase a minimum limit of $200 million HKD.
Penalties for failure to comply with the EC Ordinance are severe: fines can go up to $100,000 HKD and prison sentences can be as long as 2 years.
As a new employer in Hong Kong, it behoves you to be aware of these statutory requirements and comply with them. While this might represent an added cost of doing business here, it’s well worth the investment to have a presence in this major economic hub.
How do I Ensure Compliance with Hong Kong’s Labour Laws?
Prior to hiring any employees in Hong Kong, you have to make sure you have the insurance necessary to satisfy statutory requirements. While standalone policies are available, it’s usually better to bundle it along with your general liability, commercial property or other insurance policies for a discount.
We work with a ton of different carriers providing Employees’ Compensation Insurance. If you’d like to learn more about your different Employees’ Compensation Insurance options, click here or contact us.