Employers told to prep for cost of part-time work bill

The F&B, tourism, retail, and entertainment industries will be the most affected.

A Hong Kong push to ease benefit eligibility for part-time workers may prompt employers to shift to fixed-term job contracts to avoid additional costs, which could total around $150m a year across all industries.

“Businesses are likely to consider the balance between full-time and part-time staff as a higher proportion of part-time staff are likely to be entitled to the same employment protections and benefits as full-time staff,” Kathryn Weaver, a partner at Seyfarth Shaw LLP, told Hong Kong Business.

“Employers could define working hours clearly,” she said in an emailed response, adding that changes to the employment ordinance could add about $150m in annual costs for Hong Kong employers.

The government estimates that the measure is expected to benefit around 11,400 workers, she added.

Under the measure announced on April 11, employers must follow the 4-68 rule, where a worker who works 68 hours for four straight weeks is considered a “continuous contract” employee entitled to benefits such as rest days, paid annual leave, sickness allowance, and severance pay.

Previously, employees had to work at least 18 hours per week for four consecutive weeks. Wendy Wong, partner at Simmons & Simmons, said the old rule was often exploited by employers who reduced hours in a single week to avoid obligations.

“Given the increased costs that come with compliance with the 4-68 rule, employers may choose to design their employees’ work schedules so that they fall outside the 4-68 threshold,” Cynthia Chung, a partner at Deacons, said in an emailed reply to questions.

Weaver said employers should review existing contracts for any potential increase in labour costs. “Once the bill has been implemented, employers should also update any definitions of ‘continuous contract’ in their employment contracts and policies.”

The food and beverage, hospitality, retail, construction, and entertainment industries, which rely heavily on part-time workers, may need to adjust their budgets, said Stephanie Yip, a senior associate at Deacons.

Weaver said the bill aligns with a global trend and reflects the growing recognition of the importance of flexible and part-time work, even though the scope is relatively modest compared to some international standards.

The Labour Department expects the bill to bring people back into the workforce and help employers facing a manpower shortage.

Hong Kong’s unemployment rate was steady at 3.2% from January to March, with about 11,100 more people with no jobs in the first quarter.