Effective from January 2026, a new law in Hong Kong will broaden the definition of a 'continuous contract', making it easier for employees to qualify for statutory employment benefits. We look at the details below.
The new law and 'continuous contracts'
In Hong Kong, employees receive additional statutory benefits if they work under a 'continuous contract'. Under the current rules, an employee in Hong Kong is considered to be under a 'continuous contract' if they have been employed continuously by the same employer for four weeks or more and have worked at least 18 hours in each week. This is known as the '418 rule'.
The Employment (Amendment) Bill 2025, gazetted on 27 June 2025 and in-force from 18 January 2026, will change this position by amending the definition of a 'continuous contact' under the Hong Kong Employment Ordinance. The two key changes are as follows:
- The Bill reduces the weekly working hours needed for an employment contract to qualify as a 'continuous contract' from 18 hours to 17 hours.
- It allows the use of aggregate working hours of 68 hours or more over a four-week period as an alternative way to meet the 'continuous contract' requirement. Some are calling this a new '468' arrangement, replacing the current '418 rule'.
Under the new legislation, employees will only be required to work 17 hours per week for four or more consecutive weeks, or for an aggregate of at least 68 hours over a four-week period in order to qualify for additional statutory employment benefits. This includes statutory holiday pay, statutory annual leave, statutory maternity and paternity leave, statutory sickness allowance, and statutory severance / long service payment.
The potential impact
The potential impact of the change cannot be understated. A Government spokesperson has said:
...This amendment exercise lowers the working hours threshold of the 'continuous contract' requirement and introduces flexibility in the calculation of working hours, reducing the circumstances of disrupting the continuity of an employee's employment because the working hours of a week occasionally fall below the threshold.
The proposed change will ultimately make it easier for employees to meet the 'continuous contract' requirement and it is therefore expected that the pool of employees who will be able to qualify for statutory employment benefits will widen considerably.
Takeaway for employers
The upcoming change will expand access to statutory benefits by easing the criteria for what constitutes a 'continuous contract'.
In advance of the new rule coming into effect next year, employers should review employment contracts and, with more employees likely to qualify for statutory benefits, anticipate potential increases in entitlements such as holiday pay, sick leave, and severance payments.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
