What Is The 713 Ordinance In Hong Kong?Implemented on July 13, 2007, the Employment (Amendment) Ordinance is a set of legal guidelines that determine a specific employee’s statutory entitlements in Hong Kong. The name 713 Ordinance comes from the date the ordinance came into effect – July 13, 2007. The ordinance covers eight key statutory entitlements for employees that ensure they are compensated properly for their work across a variety of circumstances. In this article, we will break down the 713 Ordinance, and how you can ensure that your Hong Kong company stays compliant with the help of a professional team.
What You Will Learn:
- What Are The 8 Key Statutory Entitlements?
- How To Calculate 12-Month Average Wage
- Are There Exceptions To 713 Ordinance Wages?
- What Are The Penalties Of Not Holding To The 713 Ordinance?
- Stay Compliant With The 713 Ordinance With Fastlane
1. What Are The 8 Key Statutory Entitlements?The 713 Ordinance ensure that Hong Kong employees receive eight key statutory entitlements:
- Holiday pay
- Annual leave pay
- Sickness allowance
- Maternity leave pay
- Paternity leave pay
- End of year payment
- Payment in lieu of notice
- Amounts for non-compliance with an order of reinstatement due to unreasonable and unlawful dismissal
2. How To Calculate 12-Month Average Wage?To ensure that your HK business is following the 713 Ordinance entitlements, it is important to properly calculate your employee’s 12-month average wage. The Average Daily Wage (ADW) can then be used to calculate statutory entitlements. To calculate ADW:
((Total wages earned in a 12-month period) – (Total earnings for days with less than full wages))
(Days in the 12-month period) – (Days with less than full wage)By calculating this amount for every employee, and then taking into account the eight statutory entitlements for each, you can ensure that you are paying and providing for each employee in such a way that you are compliant with the 713 Ordinance.
3. Are There Exceptions To 713 Ordinance Wages?There are exceptions to what can be considered wages – and therefore fall under 713 Ordinance entitlement:
- Retirement scheme contributions
- Discretionary bonuses
- Directly reimbursable travel expenses
- Employer-provided accommodation, education, food, or medical care