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More people might join the labour market in Hong Kong because of the coming change, a lawmaker says. Photo: Eugene Lee

Hong Kong to close loophole allowing employers to avoid providing benefits to part-time workers

  • Employer and employee representatives on Labour Advisory Board reach consensus on amendment to so-called 418 regulation
  • Only people working for four straight weeks or more for at least 18 hours each week are considered to be hired under a ‘continuous contract’, entitling them to benefits

A labour regulation exploited by some firms in Hong Kong to avoid providing benefits to part-time staff will be revised after representatives of the city’s employers and employees reached a consensus on greater protection for such workers.

Unions welcomed the move on Thursday, saying it would plug a long-standing loophole in the “418” regulation but a catering industry leader warned the change would increase the financial burden of restaurants, especially less-profitable ones.

Under a 30-year-old rule, only people working for the same employer for four consecutive weeks or more for at least 18 hours each week are considered to be hired under a “continuous contract”, entitling them to benefits such as rest and sick days, and paid annual leave.

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The regulation will be amended soon to ease the criteria for part-timers to get benefits.

“This is, of course, good news for us as it can plug the loophole and stop some unconscionable employers from exploiting part-time workers. They include the Hong Kong Jockey Club,” said legislator Michael Luk Chung-hung of the Federation of Trade Unions (FTU).

“Some employers intend to evade employment benefits so they may ask their staff to work many hours in each of the first three weeks and fewer than 18 hours in the fourth week.”

Employer and employee representatives on the Labour Advisory Board reached a consensus on the amendment, under which the total number of working hours will be calculated based on a four-week period instead of one week and a threshold set at 68 hours.

The measure was among labour initiatives announced in Chief Executive John Lee Ka-chiu’s policy address last October.

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A government spokesman said both sides had reached a consensus after they “candidly expressed their views and, after thorough and in-depth deliberations”.

“The amendments will contribute to enhanced protection of the rights and benefits of employees with shorter working hours,” he said.

The spokesman added the government would commence the relevant legislative work and introduce an amendment bill to the Legislative Council for scrutiny upon completion of the drafting.

Luk said he expected the government would table the bill and have it passed this year.

Another unionist lawmaker, Kingsley Wong Kwok, said the change would ensure greater benefits for part-time workers and serve to attract more people to join the labour market and ease the city’s manpower crunch.

But he urged the government to mandate that employers offer greater benefits to those failing to meet the new “468” requirement, saying some bosses might get around the rule by arranging for staff to work less than 68 hours in four weeks.

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According to government data, the number of part-time employees working less than 18 hours per week for the same bosses surged by 177 per cent over the past decade to 155,800 in 2019-20.

“Official data shows some 100,000 part-timers are still falling outside the protection of the new ‘468’ rule as they work less than 68 hours in four weeks,” Wong said.

“I hope the government will require employers to offer staff benefits on a pro-rata basis for this group of people to prevent bosses from getting around the rule.”

Simon Wong Ka-wo, president of the Hong Kong Federation of Restaurants and Related Trades, said the new requirement would inevitably increase labour costs of bosses amid a difficult operating environment, especially those with little profit.

“During the past three years of the Covid-19 pandemic, many outlets suffered hefty losses. The new requirement will unavoidably increase their financial burden as they may need to dish out more money to pay for staff benefits,” he said.

“For big companies, they can afford the rise in labour costs, but for the small and medium firms, they may not be able to cope with the rising costs. They may end up hiring more part-timers to get around the ‘468’ rule.”

The Post has contacted the Jockey Club for comment.