The Hong Kong government has proposed to relax the “418” rule for determining continuous employment under the Employment Ordinance (“EO”).

What is the "418" rule?

Currently, the "418" rule specifies that an individual working for the same employer for four or more consecutive weeks, with each week working at least 18 hours, is considered to be under a "continuous contract" of employment (“continuous employment”) within the meaning of the EO. An employee under continuous employment is eligible for various benefits under the EO, such as sick days, annual leave, and other statutory entitlements.

The proposed change

Instead of assessing whether the employee has the number of qualifying hours on a week-by-week basis, the Hong Kong government’s proposal is to tally total work hours over a four-week period, such that continuous employment will be triggered if an employee works at least 68 hours over a four-week period. The intention of the proposed change is to extend statutory benefits to a wider pool of employees, particularly those in part-time or casual employment.

 A bill to amend the EO will be tabled before the Legislative Council in due course and we will provide an update once details of the bill is available. In the meantime, employers may wish to consider how this proposed change may impact its employees and payroll arrangements.