Can Employers Buy out Employees’ Holidays?

Can Employers Buy out Employees’ Holidays?

For the catering industry, retail industry, and clinic, working hours are based on the shifts. Almost all front-line employees are unlikely to have a fixed nine to six working hours or a five-day workweek as office workers do, or enjoy the statutory holidays or public holidays.

However, there are always unwritten rules in these “long working hours” industries, for example, seven days a week, 10 hours a day, one-hour meal break. Some employers ask employees to work on rest days and statutory holidays without arranging other rest days for their employees. They only pay them one day’s salary as compensation instead, which is commonly known as “buy-out”.

Maybe some employees don’t care. If they have money, they can go to work without a rest day. However, as an employer, you can’t follow an employee’s “OK”. You must understand the labor law, even if you are questioned by employees in the future, you can also reply to them in a legal way.

Definition of statutory holidays or public holidays under the Employment Ordinance

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. An employee employed under a continuous contract is entitled to not less than one rest day in every period of seven days.

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.

An employee, except young persons under the age of 18 employed in industrial undertakings, may work voluntarily on a rest day. However, whether a 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 13 statutory holidays :

  • the first day of January
  • Lunar New Year’s Day
  • the second day of Lunar New Year
  • the third day of Lunar New Year
  • Ching Ming Festival
  • Labour Day, being the first day of May
  • Birthday of the Buddha
  • Tuen Ng Festival
  • Hong Kong Special Administrative Region Establishment Day, being the first day of July
  • the day following the Chinese Mid-Autumn Festival
  • Chung Yeung Festival
  • National Day, being the first day of October
  • Chinese Winter Solstice Festival or Christmas Day (at the option of the employer)

Note: Easter is not a statutory holiday.

If the employer requires the employee to work on a statutory holiday, the employer should give an employee not less than 48 hours’ prior notice before the alternative holiday. An alternative holiday should be arranged within 60 days before or after the statutory holiday. If the employer and employee agree, any day within 30 days before or after the statutory or alternative holiday may be taken by the employee as a substituted holiday.

Note: Regardless of whether an employee is entitled to holiday pay, an employer should grant his employee a statutory holiday, or arrange an “alternative holiday” or “substituted holiday”. An employer must not make any form of payment to the employee in lieu of granting a holiday. In other words, “buy-out” of a holiday is not allowed

To put it simply, there is not expressly stipulated in law that employers can not “buy out rest days”, but employers must not “buy out statutory holidays”. Therefore, when employers require employees to work on rest days and statutory holidays, and pay the compensation, then you should know whether the compensation is for rest days or statutory holidays, so as to avoid labor disputes.

An HR system can manage employee rostering, leave, and payroll that can greatly reduce the pressure on employers and HR. If the working hours in shifts are changed, the salary will automatically change as well. There is no need to use Excel to record back and forth.

Read More:

Can an Employer Ask Employees to Work on the Rest Days?
Do Employees Have Paid Sick Leave During Probation?

Different calcualtion methods are supported

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