Concise Guide to the Employment Ordinance
Chapter 4: Wages
An employee shall enjoy rest days, statutory holidays and paid annual leave during employment.
REST DAY
Eligibility for Rest Day
An employee employed under a continuous contract is entitled to not less than one rest day in every period of seven days.
Definition of a Rest Day
A rest day is defined as a continuous period of not less than 24 hours during which an employee is entitled to abstain from working for his employer.
Appointment of Rest Days
Rest days shall be appointed by the employer. They may be granted on a regular or irregular basis:
regular rest days
 the employer should inform his employees of the arrangement
irregular rest days
 before the beginning of each month, the employer must inform his employees orally or in writing the appointed rest days or by displaying a roster showing the dates of the appointed rest days for each employee
An employer may substitute some other rest day with the consent of the employee, in which case it must be within the same month before the original rest day or within 30 days after it
 
If the statutory holiday falls on a rest day, it should be taken on the day following the rest day.
 
Compulsory Work on Rest days
An employer must not compel an employee to work on a rest day except in the event of a breakdown of machinery or plant or in any other unforeseen emergency. For any rest day on which the employee is required to work, the employer should substitute some other rest day within 30 days after the original rest day. The employer should notify the employee of the arrangement within 48 hours after the employee is required to work.
Offences and Penalties
An employer who fails to grant rest days to his employees or compels his employees to work on their rest days is liable to prosecution and, upon conviction, to a fine of $50,000.
Voluntary Work on Rest Days
An employee, except young persons under the age of 18 employed in industry, may work voluntarily on a rest day.

Any condition in a contract of employment which makes payment of any type of annual bonus or end of year payment conditional on an employee agreeing to work on rest days is void.
Rest Day Pay
Whether rest day is paid or not is to be agreed by employers and employees.
STATUTORY HOLIDAYS
An employee, irrespective of his length of service, is entitled to the following statutory holidays :
1
 the first day of January
2
 Lunar New Year's Day
3.
 the second day of Lunar New Year
4.
 the third day of Lunar New Year
5.
 Ching Ming Festival
6.
 Labour Day, being the first day of May
7.
 Tuen Ng Festival
8.
 the day following the Chinese Mid-Autumn Festival
9.
 Chung Yeung Festival
10.
Chinese Winter Solstice Festival or Christmas Day (at the option of the employer)
11.
Hong Kong Special Administrative Region Establishment Day, being the first day of July
12.
National Day, being the first day of October
Work on Statutory Holidays
If an employee is required to work on a statutory holiday, 48 hours' prior notice must be given. His employer must also arrange an alternative holiday within 60 days before or after the statutory holiday. If the employer and employee agree, any day within 30 days of the statutory or alternative holiday may be taken by the employee as a substituted holiday.
Holiday Pay
An employee having been employed under a continuous contract for not less than three months is entitled to the holiday pay. Holiday pay should be paid to the employee not later than the day on which he is next paid his wages after that statutory holiday.
Holiday pay is a sum equivalent to the normal wages which the employee would have earned if he had worked on a full working day. For an employee employed on piece rates or whose daily wages vary from day to day, the holiday pay should be a sum equivalent to the average daily wages earned by him on the days he had worked during every complete wage period. The wage period should be a period of not less than 28 days and not more than 31 days immediately preceding or expiring on the holiday.
An employee who in normal circumstances only works half a day on Saturdays and receive half-day's pay is entitled to a full working day's pay as holiday pay if a statutory holiday falls on Saturday.
Restriction on Pay in lieu of Holiday
An employer must not make any form of payment to an employee in lieu of granting him a holiday.
Offences and Penalties
An employer who fails to grant statutory holidays, alternative holidays or substituted holidays, or fails to pay holiday pay to an employee is liable to prosecution and, upon conviction, to a fine of $50,000.
PAID ANNUAL LEAVE
An employee is entitled to annual leave with pay after having been employed under a continuous contract for every 12 months. An employee's entitlement to paid annual leave increases progressively from seven days to a maximum of 14 days according to his length of service:
Years of Service
Annual Leave Entitlements
1
7
2
7
3
8
4
9
5
10
6
11
7
12
8
13
9 or above
14
Granting of Annual Leave
An employee shall take the paid annual leave to which he is entitled within the following period of 12 months.
The time of the leave should be appointed by the employer after consultation with the employee or his representative, confirmed by a written notice to the employee at least 14 days in advance, unless a shorter period has been mutually agreed.
Paid annual leave should be granted for an unbroken period. If the employee so requests, it may be granted in the following manner:
Leave entitlement not exceeding 10 days
up to 3 days can be granted separately; the balance should be granted consecutively
Leave entitlement
at least 7 days should be granted consecutively7
exceeding 10 days
  
Any rest day or statutory holiday falling within a period of annual leave will be counted as annual leave and another rest day or holiday must be appointed.
Annual Leave Pay
Annual leave pay is a sum equivalent to the normal wages which the employee would have earned if he had worked during the period of annual leave.
For an employee employed on piece rates or whose daily wages vary from day to day, the annual leave pay should be a sum equivalent to the average daily wages earned by him on the days he had worked during every complete wage period. The wage period should be a period of not less than 28 days and not more than 31 days immediately preceding the annual leave or the day on which the employment contract terminates.
Annual leave pay should be paid to the employee not later than the normal pay day after the period of annual leave taken.
Offences and Penalties
An employer who fails to grant annual leave or pay annual leave pay to an employee is liable to prosecution and, upon conviction, to a fine of $50,000.
Restriction on Pay in lieu of Leave
An employee may choose to accept payment in lieu of the part of his leave entitlement which exceeds 10 days.
Payment of Annual Leave Pay on Termination of Employment Contract
A leave year means any period of 12 months commencing on the day on which his employment commenced and an anniversary of such day.
If an employee has been employed for a leave year and his employment contract is terminated, irrespective of the reasons of termination, he should be entitled to payment in lieu of any annual leave not yet taken.
An employee with three but less than 12 months' employment in a leave year and his employment contract is terminated other than for the reason of summary dismissal due to his serious misconduct, he would be entitled to pro rata annual leave pay.
Calculation of Annual Leave Pay on Termination of Employment Contract:
Period of employment
Annual Leave Entitlements
less than 12 months
less than 3 months
Nil
3 to 12 months
 3 to 12 months summary dismissal
Nil
resignation annual leave entitled
in the current leave year x period of employment (days) /365
dismissed other than summary dismissal
12 or more than 12 months
less than 3 months in the current leave year annual
leave not yet taken*
3 to 12
annual leave not yet taken*
12 or more than 12 months summary dismissal
annual leave not yet taken*
resignation annual leave not yet taken* + annual leave entitled in the current leave year x period of employment in the current leave year (days) /365
dismissed other than summary dismissal
* This refers to any accrued annual leave which have not yet taken in the previous leave year.
 
Common Leave Year
An employer may elect any period of 12 consecutive months as the common leave year for all of his employees. Should the employer wish to make this arrangement, he shall give one month's notice either to each of his employees in writing or by posting a notice in a conspicuous place in the place of employment.

If an employee has not been employed for 12 months in the common leave year, the employer should calculate his leave entitlement on a pro rata basis, and any fraction of a day resulting from the calculation should be counted as a full day's leave.

After consultation with his employer, the employee may opt to take the pro rata annual leave accrued preceding the commencement of the next common leave year or carry it forward and combine it with his leave accrued in the next leave year.
[Example] common leave year: 1.1.2001 to 31.12.2001
commencement date of employment: 1.9.2001
pro rata annual leave: 122* / 365 X 7
= 2.31 days (round up to 3 days)
(*122 is the number of days between 1.9.2001 and 31.12.2001)
The employee may take the 3 days' leave in 2002, or combine it with his 7 days' leave accrued in 2002 and take 10 days' leave in 2003.
 
Annual Leave Shutdown
If an employer intends to close down his business or part of his business for granting annual leave to his employees, he should inform the affected employees in writing at least one month in advance.
Where an employee is not yet entitled to paid annual leave in respect of any day during the period of shutdown but he has to stop work as a result, he should be granted paid annual leave during that whole period.
If the annual leave an employee is entitled exceeds the number of days of shutdown, he may take the remaining annual leave immediately following the shutdown.
The common leave year elected by the employer should not be affected by an annual leave shutdown as the annual leave granted shall be in respect of the leave year immediately preceding the period of the shutdown.