What is annual leave? How many days of annual leave in a year should I give my employees?

During their period of employment, employees are entitled to enjoy statutory holidays, rest days and paid annual leave. Annual leave refers to paid time off work given by employers to employees. In Hong Kong, an employee is entitled to paid annual leave every 12 months if they have been employed under a continuous contract.

Calculation of annual leave

The number of days of annual leave depends on an employee’s length of service:

If a rest day or a statutory holiday falls within the period of annual leave, they will be counted as annual leave. Hence, another rest day or holiday must be appointed by the employer.

If an employee has completed service of at least 3 months but less than 12 months within a leave year, they are entitled to pro-rata annual leave pay unless the employee is summarily dismissed by the employer.

There are certain steps that an employer must take when granting paid annual leave:

• Consult with your employee or their representative regarding the appointment of the time of the leave
• Confirm the leave by issuing a written notice to your employee at least 14 days in advance, unless a shorter period has been agreed between you and your employee

However, you must not include a term to forego any or all of your employee’s annual leave entitlement in their employment contract (including payment of wages in lieu of any or all annual leave days), unless your employee chooses to accept payment in lieu of a part of their annual leave entitlement that exceeds 10 days.

Bibliography:

1. Labour Department, ‘Chapter 4: Rest Days, Holidays and Leave’: https://www.labour.gov.hk/eng/public/wcp/ConciseGuide/04.pdf

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