Part-time Hourly-rated Employees: Can an employer make payment to an employee in lieu of a statutory holiday?

Share on facebook
Share on twitter
Share on linkedin

According to the Employment Ordinance, if an employer requires a part-time hourly employee to work on statutory holidays, it is necessary to check whether the employee complies with regulation 418 as well as if entitles the leave in lieu.

We are here to share the conditions of paid statutory holidays for part-time hourly employees, how their allowances are calculated, and some related topics that employers need to be aware of.

Statutory holiday entitlement

All employees, irrespective of length of service, or whether they are employed on a continuous contract (continuous employment with the same employer for 4 weeks or more, with at least 18 hours of work per week) are entitled to 12 statutory holidays.

Are the statutory holidays paid or not paid?

According to the Employment Ordinance,

An employee having been employed under a continuous contract for not less than 3 months is entitled to pay on statutory holidays.

The following examples will illustrate for you:

Example 1: Billy is a part-time hourly employee of a convenience store and has been employed continuously for 4 months at 20 hours per week. It is an employee who is employed on a continuous contract for more than 3 months. Therefore, Billy is entitled to the allowance on statutory holidays.

Example 2: Buck is a part-time hourly employee of a fast food restaurant who has been employed for 2 consecutive months and meets the criteria for continuous contract employment. Therefore, Buck is entitled to 12 statutory holidays, but cannot receive allowances on the day of the holiday.

How is statutory holiday pay calculated?

The daily rate of statutory holiday pay is a sum equivalent to the average daily wages earned by an employee in the 12-month period preceding the day of the statutory holiday or the first day of the statutory holidays (if more than 1 consecutive statutory holiday).

If an employee is employed for less than 12 months, the calculation shall be based on the shorter period.

In calculating the average daily wages, an employer has to exclude

(i) the periods for which an employee is not paid his wages or full wages, including rest day, statutory holiday, annual leave, sickness day, maternity leave, paternity leave, sick leave due to work injuries or leave taken with the agreement of the employer, and any normal working day on which the employee is not provided by the employer with work; together with 

(ii) the sum paid to the employee for such periods.

Statutory 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.

Example: Brady is a part-time employee on a continuous contract for 8 months. The daily wage is 300 HKD/day, and the part-time job is three days a week. Due to physical reasons, he took 2 days of paid sick leave last month and 5 consecutive days of sick leave. When calculating the statutory holiday allowance on January 1, how is it calculated?

In calculating the average daily wages for 12 months, the periods and wages to be excluded:

  • Since Brady has been employed for less than 12 months, the shorter period is calculated. Eliminate 5 consecutive sick days (where no paid or full paid) from the past 8-month period, i.e. 96 days minus 5 days
  • Eliminate 5 consecutive days of sick leave from Brady’s total wage for the past 8 months

Average Daily Wage = 8 Months Total Wages – 5 days of continuous sick leave pay (HKD) / 96 – 5 (Days)

                                  = 27600 (HKD) / 91 (Day)

                                  =303.3 (HKD)

The above content is to help employers identify which employees are entitled to statutory holidays and how allowances and ADW are calculated.

Next, this article will introduce what should be noted if an employee work on a statutory holiday:

What should employers pay attention to when employees work on statutory holidays?

According to the Employment Ordinance, employers can require employees to work, but they need to pay attention to:

  • An employer is required to give his employee at least 48 hours’ prior notice for work on a statutory holiday. The employer must then 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 substitute holiday. 

Based on the above two situations, the Labour Department recommends that employers should keep clear records of the alternative or substitute holiday taken by an employee.

Can an employer make payment to an employee in lieu of a statutory holiday?

According to the Employment Ordinance, employers can require employees to work on statutory holidays, but must not make any form of payment to an employee in lieu of a statutory holiday.

Employers cannot use money to buy Leaves or pay extra wage directly.

The employer who contravenes this provision is liable to prosecution and, upon conviction, to a fine of HK$50,000.

If the statutory holiday falls on a rest day, a holiday should be granted on the day following the rest day which is not a statutory holiday or an alternative holiday or a substituted holiday or a rest day.

As a cloud-based, one-stop Attendance & Payroll platform, Workstem can help you keep employees’ leave records completely so that you can view them anytime, anywhere, and also professionalize attendance and leave management. 
Click the link below now to experience a free 14-day human resources (HR) system! Come and join us!

(The content and information in this article are for reference only. The accuracy and reliability of the information are subject to the latest government regulations.  If you want to reprint the article or content, please contact us first or attach a link to this article, and indicate the source of reprint.)
Recommended Articles

Part-time Hourly-rated Employees: Can an employer make payment to an employee in lieu of a statutory holiday?

According to the Employment Ordinance, if an employer requires a part-time hourly employee to work on statutory holidays, it is necessary to check whether the employee complies with regulation 418 as well as if entitles the leave in lieu.
We are here to share the conditions of paid statutory holidays for part-time hourly employees, how their allowances are calculated, and some related topics that employers need to be aware of.

Read More →

When will an employee be entitled to severance & long service pay

Under what circumstances should an employer pay his employee severance payment? How to calculate severance payment and long service payment? These are the common topics for our HR or employers to tackle. For more information on long service payment and severance pay, Let’s check out more with Workstem now!

Read More →

Categories

Prevent Employee Disputes, Receive the Latest HR News in Your Inbox Weekly!

Reader Interactions

Leave a Reply

Your email address will not be published. Required fields are marked *