For many years, Hong Kong has been seen as a generally attractive destination for investment and the ideal location for multinational businesses to set up Asian headquarters.
This reputation is driven, in part, by a sense that Hong Kong is generally an employer-friendly jurisdiction – in terms of relatively flexible employment regulations and the work ethic in the SAR.
A Labour Department report in 2012 found that nearly 85 per cent of the working population in Hong Kong work more than 40 hours a week. As so many of us know – the working day in Hong Kong can often become the working night.
To some extent, long working days are typical in Asia generally – many Asian countries have longer working days than other parts of the world. However, Hong Kong is distinct from comparable jurisdictions – such as Singapore, Japan and South Korea – in that there are currently no laws which standardise or regulate the length of the working day.
The change
The Standard Working Hours Committee was set up in 2013 to follow up on the 2012 Labour Department report and to advise on the legal regulation of working hours. The committee has now agreed to recommend introducing laws to regulate the working hours in Hong Kong.
Although it is unclear what sanctions would apply for a failure to comply with new laws, it is likely that fines would be imposed on employers. This could have a large material impact, particularly for smaller employers. It is possible that criminal penalties could also apply, as they do for breach of the minimum wage legislation in Hong Kong.
While it is not yet known what the final legislation will look like, it is likely that the new law will allow flexibility for those industries which are traditionally built on longer working days – such as investment banking roles and other professional services. The law is also expected to make allowances for those roles where the demands of the job require unconventional working patterns – for instance, security guards and emergency services workers.
The response
While waiting on the final legislation, companies can prepare for new regulations now. The companies that are most vulnerable to these changes will be the ones that are yet to take stock of the nature of the work being carried out by employees, the number of daily working hours and the agreements under which people are employed.
In preparation for standardised working hours, employers should consider conducting an audit of their staff and identify employees who work unusually long hours. This process may also reveal lingering inefficiencies within the company and present opportunities for change that benefits the employees, in terms of creating a better work-life balance, and the company, in terms of cost effectiveness.
The best prepared companies will make sure they are in good habits. It is likely that any proposed legislation in this area will require employees to spell out working hour requirements – regular or irregular – in employment contracts going forward.
Employers should seek to set out clear working hours, lunch hours, rest days and the provision of overtime pay in their employment contracts. This is best done when a new staff member joins the business, with a contract that meets internal standards and external legal requirements.
Companies should prepare for this change as early as possible. While a grace period with change of this sort is common, our experience is that the companies best prepared to deal with new regulations are the ones which plan ahead
Conclusion
Change of this sort can often feel unsettling for employers – particularly for smaller companies without dedicated HR functions – but it doesn’t have to be that way. Sensible management of employee working hours will promote a stronger appreciation for work-life balance in your team, and ultimately may lead to reduced absenteeism and less lower staff turnover.
This article appeared in the Classified Post print edition as Get ready for the new law on working hours.
