GPMI Home
Access FREE world-class global payroll education and compliance resources: Subscribe
Access FREE world-class global payroll education and compliance resources: Subscribe

Features

U.K. Apprenticeship Levy—Funding More Apprenticeships

By Max Miao

HongKong1464817328_59992Hong Kong, much like many states in the United States and countries around the world, has its own specific and often complex labor laws. Hong Kong’s variety of specific requirements is included as part of The Labor Department of Hong Kong’s Employment Ordinance, the main piece of legislation governing conditions of employment in Hong Kong. Since its enactment in 1968, the benefits provided for under the Ordinance have been continuously updated and enhanced and now cover a comprehensive range of employment protections and benefits for employees. The 418 Rule is one of the more complex of these protections.

 

Understanding the 418 Rule

The 418 Rule states that the status of employees in Hong Kong is determined by whether they are in “continuous employment,” defined in the law as when an employee is employed by the same employer for four or more consecutive weeks, and works at least 18 hours in each of those weeks—hence the name “418.” While employees in Hong Kong are entitled to basic benefits and protections under the law, those who are “continuously employed” qualify for additional measures (see Protections and Benefits below).

 
Protections_1464817337_51144

What’s at Stake?

According to the Labour Department of the Government of the Hong Kong Special Administrative Region, the 418 Rule specifies that: “In any dispute as to whether a contract of employment is a continuous contract, the onus of proving that it is not a continuous contract shall be on the employer.” The Employment Ordinance itself sets out specific record-keeping guidelines that employers must follow to remain in compliance. 

These include keeping record of an employee’s:

  • Name and identity card number
  • Date of commencement of employment
  • Job title
  • Wages paid for each wage period
  • Wage period
  • Total number of hours worked in each wage period
  • Periods of annual leave, sick leave, maternity leave, paternity leave, and holidays entitled and taken, together with details of payments made in respect of such periods
  • Amount of end-of-year payment and the period to which it relates (if applicable)
  • Period of notice required for termination of contract
  • Date of termination of employment (if applicable)

 

The Employment Ordinance also specifies that every employer must at all times keep a record setting out the wage and employment history of each employee covering the period of his employment during the preceding 12 months, and that all records should be kept for a period of another six months after the employee ceases to be employed.

Employers that fail to meet any or all of these requirements can incur fines of anywhere from $10,000 to $100,000.

In addition, “Any person who fails to comply with the requirements of the officers of the Labour Department is liable to prosecution and, upon conviction, to a fine of $100,000 and to imprisonment for one year,” per the Government of Hong Kong Labour Department.

So, it’s fair to say the stakes are incredibly high and that complying with the 418 Rule specifically, and the Labour Department in general, is an absolute imperative for any employer in Hong Kong. 

Complying With the 418 Rule: How Technology Can Help


If you are a small employer—say under 15 or 20 employees—keeping these kinds of records on each employee may not be all that difficult. It will require concerted organization and attention to detail, but may not prove to be an overwhelming task. But what if you are a larger or very large employer? What if you are trying to keep track of all of this information for hundreds or thousands or tens of thousands of employees? And what if you need to make decisions in real time in order to appropriately schedule employees without inadvertently breaking the 418 Rule?  This is where technology can help.

Step 1: Track the hours your employees work

Keeping accurate and up-to-date records of the hours your employees work is the most basic and effective way to adhere to the guidelines of any local labor laws. While a small employer may be able to keep track of the hours its employees work in a spreadsheet or home-grown system, larger employers really must look at automated time and attendance solutions that enforce pay and work rules—consistently and accurately—across the organization. Even better if the solution can be tailored to labor laws across geographies. These kinds of systems also tend to simplify labor-intensive timecard tracking, data entry, and approval processes, reducing the administrative time associated with managing time tracking and minimizing overpayments and compliance risk.

Step 2: Schedule smart
Now that you are keeping track of your employees’ time and making sure that they stay within the hours you want them to work, the next step is making sure your managers have this information at their fingertips when they go to schedule employees to work. An integrated scheduling system makes it easy for managers to identify which workers are available to work which shifts while still remaining under the hours limitation you have for them. Smart scheduling solutions can take into consideration the time an employee has already worked in a specific pay period and cross reference this with local labor rules, ensuring that workers do not exceed required limits. A crystal ball is not the right tool for scheduling a large, complex workforce. Good technology can help you put the right person in the right place at the right time, every time, whether you are planning shifts months in advance or calling in replacements on the day of.

When it comes to following local labor laws in Hong Kong or anywhere else around the world, remember that, as the Hong Kong government states, “the onus is on the employer.” 

You want to make sure that you are keeping the proper records for each employee, paying them accurately, and staying in compliance with any pertinent laws. You also want to be able to easily access these records both to help your managers effectively schedule employees and to defend yourself against any allegations of noncompliance. Good planning and smart technology can help you to do this effectively.