Covid-19 may have caused countries all over the world to reevaluate certain aspects of their labour policies, as well as the transition into coverage and protection in this pandemic. However, this does not necessarily deter countries from making changes to their employment laws regardless of the covid-19 situation, and analysing them would help one understand the general trend and direction a country is heading towards. In this case, Hong Kong’s recent proposed changes to their labor laws is definitely noteworthy.

In effect: Extension of Maternity Leave

In an effort to support women and to add more incentives to have children, with effect from December 2020, paid maternity leave has been extended from 10 to 14 weeks, with the additional 4 weeks reimbursed from the government. Thus, employers should update their maternity leave policies accordingly.

In other related changes, further protection for breastfeeding women has been passed in the March 2021 Employment (Amendment) bill.

Proposed: Increase in Number of Statutory Holidays

Hong Kong is unique in its number of holidays and its differences — did you know that Hong Kong has separate statutory and public, or also known as, general holidays? Employees are entitled to paid day leaves on statutory holidays, while general holidays outnumber statutory holidays by 5 days, with overlaps. Which is to say, 12 out of 17 general holidays are statutory holidays, while employees are not entitled to paid day-offs for the remaining 5.

In March 2021, the Hong Kong government had gazetted the Employment (Amendment) Bill 2021 to increase the number of statutory days to match the number of general holidays, by increments of one day every two years, until the year of 2030, when the change would be completed.

In the event that this change is executed, employers will have to be aware that their employees are now entitled to more paid leaves than before, and plan the company’s work schedules accordingly. The workforce would have been given time to adjust to these changes throughout the 8 years, and so the changes shouldn’t take anyone too much by surprise.

Proposed: Strengthening of Data Protection Laws

Personal data has become an increasingly valuable asset in the age of modern technology, while also easily abused for nefarious purposes. Employers should pay special attention to the proposal to strengthen data protection laws, as the handling of employee data would most certainly be affected. To stay fully compliant and save costs on hefty legal fees resulting from mishandling of personal data, it is important to always keep an eye on such changes.

Overall

Once a British colony, and now part of China, Hong Kong’s laws have been observed to be shifting to resemble more of China’s. These changes however are progressive changes, putting increased importance on the welfare of the workforce, as seen for the added protection of (pregnant, and breastfeeding) women, tightened security for personal data, and the increase in paid leaves in the form of additional statutory holidays. Perhaps welfare would continue to be in the spotlight of labor laws, with the increased importance on mental health taking place in developed countries too. Adding more welfare for employees would surely be a popular choice among employees, while keeping in line with the general direction these recent changes seem to be set in. For advice on HR policies as well as changes one should make in regards to employment laws, do keep our compliance advisory services in mind.

Articles referenced:

https://www.labour.gov.hk/eng/news/EAO2020.htm

https://www.info.gov.hk/gia/general/202103/05/P2021030300341.htm

It has been a long, drawn-out year with the fight against the global pandemic, and as the world shifts its gears to adapt to the new normal, there are finally more optimistic signs observed. Hong Kong, where the unemployment rate in 2020 suffered due to both political protests and the impacts of the pandemic, is finally on a gradual track to recovery.

On 20 July 2021, Hong Kong’s Census and Statistics Department revealed that the unemployment rate has dropped sharply to 5.5% for the 3 month period ending in June. Since the beginning of the pandemic in 2020, this is the lowest the unemployment rate has been. A closer look at the labour market across sectors has also confirmed that unemployment dipped across almost all the major business areas. This is even inclusive of sectors that were severely impacted by the impacts of the pandemic, such as the retail sector, in which the unemployment rate declined by 1.4 percentage points. 

Though figures still remain below pre-Covid rate, joblessness in many business services sectors such as real estate, insurance, and even retail, accommodation and restaurant sectors have dropped in tandem with the improvement of the economy. Data shows that In industries like finance, the number of people acquiring jobs has even grown.  

Undoubtedly, Hong Kong’s local economy is gaining momentum and it is on track to a gradual recovery. Given Hong Kong’s vaccine bubble scheme and the easing restrictions, the local epidemic situation is stabilising and businesses are slowly picking up and starting to hire again. It is still expected for the economic growth to continue experiencing volatility, but as of now, it is still a positive checkpoint for Hong Kong. 

If you are looking to expand your business services to Hong Kong, click here to be redirected to our PEO solutions service page. Connect with our consultants to get a deeper view of Hong Kong’s market outlook today.

This article is written in reference from:

Cannix Yau. (2021, July 20). Hong Kong unemployment rate drops to 5.5 per cent as city brings Covid-19 situation under control. Retrieved July 22, 2021, from South China Morning Post website: https://www.scmp.com/news/hong-kong/hong-kong-economy/article/3141811/hong-kong-economy-gathers-steam-unemployment-drops

Professional Employer Organisation, also known as PEO, is a term quickly gaining traction globally. Especially because we are currently living in the climate of a pandemic, this has forced many businesses to think about engaging PEO services to facilitate their expansion in the international markets. 

If you are here, chances are you are deliberating on whether or not to work with a PEO. Here are 4 reasons why it might be time for you and your business to take the leap of faith.

1. PEO helps you navigate your business

With COVID-19 throwing many business plans off tangent, we know that expanding abroad might be one of the tougher goals to achieve now. Growing a business overseas is inherently difficult and without the right investment of effort, it is easy to fail because research and experience in the particular market is the key to success for overseas expansion.

This is how a PEO can be your biggest asset. A PEO that has experience in the specific market you want to expand to, can help navigate your business and provide accurate advice with regards to legal issues and more. If you are uncertain of the business culture, HR and employment functions in said country, it is encouraged to work with a PEO that can guide your business and ensure that your business is compliant on foreign grounds.

2. PEO lets you focus on your business strategy

Hiring employees, addressing compensation, benefits and compliance issues are additional functions that can be labour-intensive and easily neglected if the right resources are not invested to look after them. But by working with a PEO, you can free yourself off taking care of these and focus on your strategic business decisions. Essentially, a PEO will act as a support function for your company to address your HR needs. Furthermore, you are leaving your people in the hands of specialised experts who can professionally manage the HR infrastructure. No more ambiguity, no more hassle.

3. PEO helps you gain a competitive advantage

This thus enhances your business’s competitive position as well, not just because you can now focus on your strategic goals. Since a PEO helps you in recruitment and employment, you will be in good hands in terms of attracting the right talents that fit your company. Not only that, a PEO can help you save time and cost since PEOs already have direct access to an extensive database of qualified candidates. This can once again help you realign and narrow your focus to just making the final hiring decision.

4. PEO protects your business

The IRS states that an estimated 40% of small businesses pay an average fine of $845 annually due to avoidable payroll and tax mistakes. All these errors and mistakes can add up to a hefty cost. Penalties aside, payroll mistakes easily kill the morale of employees, which can impact the workforce productivity if left poorly managed. In this aspect of compliance, it can be tricky for businesses that want to expand to markets that operate under different policies and regulations. While it is not impossible to navigate through it yourself, a PEO can take away the stress and provide certainty with regards to protecting your business from avoidable mistakes like such.

Ultimately, working with a PEO can bring obvious advantages to your business. If you are currently looking to expand into the Asian market, we are offering PEO services for specific markets in China, Hong Kong and Singapore. Even if you have not made a final decision, feel free to speak with our professional consultants about any enquiries. You can also click here to be redirected to our PEO Services page to learn more about what we offer.

This article is written with reference from:

The European Business Review. (2020, September 28). What does a PEO do and how can it benefit your company? Retrieved June 21, 2021, from The European Business Review website: https://www.europeanbusinessreview.com/what-does-a-peo-do-and-how-can-it-benefit-your-company/

On 2 February 2021, Hong Kong Secretary for Labour and Welfare, Law Chi-kwong, announced that the minimum wage will be frozen at HK$37.50 per hour from May 2021 up till 2023. Since the Minimum Wage Ordinance was enacted in 2011, this is the first time that the minimum wage is frozen. 

This freeze is in response to Hong Kong’s current economic recession and high unemployment rates. On top of that, the Hong Kong government believes that by freezing the minimum wage, it can help to minimise the loss of low paying jobs which threatens to further depress the unemployment rate. 

However, concerns have been raised by the HKFTU’s Rights and Benefits Committee with low-income workers in mind. In fact, the members of the committee have been lobbying for subsidies for the low-income workers to mitigate the impact of the frozen minimum wage on their quality of life. Essentially, they are fighting for the Government to offer subsidies so as to make up for the grassroots’ loss of purchasing power. 

This was however rejected as the chairwoman of the Minimum Wage Commission argued that the previous 8.7% wage increase from 2019 has outpaced inflation thus far and hence, this freeze in minimum wage will not adversely affect the purchasing power of the grassroots. Moreover, Secretary Law said that there are other government welfare policies in place such as the Comprehensive Social Security Assistance which can help this group of people. 

Ultimately, this move in freezing the minimum wage is to strike a balance between forestalling excessively low wages as well as reducing the cuts in low paying jobs. 
If you want to know more HR insights about expanding your business in Hong Kong, feel free to connect with us. Or click here to be redirected to more information about employment regulations in Hong Kong. 

This article is written with reference from:

Chau, C. (2021, May 25). Hong Kong freezes minimum wage amid pandemic woes | HRM Asia. Retrieved June 21, 2021, from HRM Asia website: https://hrmasia.com/hong-kong-freezes-minimum-wage-amid-pandemic-woes/

Cheng, S. (2021, February 4). Freezing Hong Kong minimum wage at HK$37.5 an hour is an “insult” to cleaners at Covid-19 frontlines, labour group says | Hong Kong Free Press HKFP. Retrieved June 21, 2021, from Hong Kong Free Press HKFP website: https://hongkongfp.com/2021/02/04/freezing-hong-kong-minimum-wage-at-hk37-5-an-hour-is-an-insult-to-cleaners-covid-19-frontlines-labour-group-says/

Rthk News. (2021, February 2). Govt freezes minimum wage for the first time – RTHK. Retrieved June 21, 2021, from Rthk.hk website: https://news.rthk.hk/rthk/en/component/k2/1573669-20210202.htm

With the increasing pressures to cut costs, outsourcing your HR can be an arrangement to help handle your HR functions for your business.

Typically, businesses that face the following challenges are encouraged to outsource their HR:

• Liability exposures and previous penalties due to HR lawsuits
• Lack of in-house HR staff to manage HR infrastructure
• Over focus of HR admin tasks over other business needs
• Having many variations of compensation rates across a wide range of employees
• Cost savings and budget constraints 

Recognising your businesses needs vs constraints is important in deciding whether you should outsource your HR. The next step is to decide what type of HR outsourcing your business requires. In summary, there are 2 main options:

1. Professional Employer Organisation (PEO) 
2. Human Resource Outsourcing (HRO)

The main difference between the 2 options is whether or not it utilises the co-employment model. For PEO, a co-employment model is used, which means to say that your employees will appear on the books of your PEO partner for legal and tax functions. Essentially, your PEO partner manages all employment matters with regards to the employee. For HRO, a co-employment model is not used, so your employees have a direct employment relationship with you and they remain in your company’s books. However, your HRO partner manages all the HR tasks for you. Depending on what you need help in, HRO offers flexibility by handling a certain HR task for you, like payroll processing.

If you think that your business will benefit from outsourcing your HR, click here to be redirected to our HR Outsourcing page to learn more about what services we offer and how to connect with us.

This article is written with referene from:

Freedman, M. (2020, September 23). Should You Outsource HR? Retrieved June 21, 2021, from Business News Daily website: https://www.businessnewsdaily.com/15827-outsourcing-your-hr.html