What is annual leave?
Annual leave refers to paid time off to employees as a part of the Employment Ordinance. According to the labour law, an employee is entitled to annual leave with pay after having been employed under a continuous contract for every 12 months.
Unlike the employee benefits in some places around the world, annual leave hong kong does have minimum annual leave provisions which employers must adhere to. More specifically, an employee’s entitlement to paid annual leave increases progressively from seven days to a maximum of 14 days according to his/her length of service.
Importance of annual leave hong kong
Not taking proper rest breaks has been shown to be a condition known as burnout where in this case your employee may have a decline in work performance, poor decision making, higher rate of errors and the tendency to develop lack of empathy to clients and colleagues as well.
Annual leave is a good way to promote employees’ good physical and mental health, and will improve their work-life balance. It allows them to take a breath which will reduce the stress and improve mood, benefiting staff morale and working efficiency.
How is annual leave granted?
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 |
*Although the regulations state that annual leave must be for an uninterrupted period. However, if requested by the employee, the employer may grant annual leave according to the total number of paid annual leave in the following manner:
Less than 10 days: holidays of no more than 3 days can be granted separately, while the remaining annual leave should be granted consecutively;
More than 10 days: At least 7 consecutive days of annual leave are issued, and the remaining annual leave can be issued separately.
An employer who without reasonable excuse fails to grant annual leave to an employee is liable to prosecution and, upo conviction, to a fine of HK$50,000.
Who determines the timing of annual leave?
The timing of the leave should be appointed by the employer after consultation with the employee or his representative. The employer should confirm by a written notice to the employee at least 14 days in advance, unless a shorter period has been mutually agreed.
Calculation of annual leave pay
When it comes to annual leave pay, the rate of it is a sum equivalent to the average wage earned by an employee in the 12-month period preceding the following specified dates. But if the employee is employed for less than 12 months, the calculation shall be based on the shorter period.
| Day(s) of annual leave | Specified date |
| 1 day | Day of annual leave |
| More than 1 consecutive day | First day of annual leave |
Note: When calculating the average daily wages, an employer has to exclude (i) the periods for which an employee is not paid his/her wages or full wages, including rest day, statutory holiday, annual leave, sickness day, maternity 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.
Calculation of annual leave pay on termination
In any case, if you resign after passing the probationary period, even if you have not worked for a full year, you will still have some unused paid annual leave, and the number of days of annual leave is calculated as follows:
As for how to deal with the remaining paid annual leave, the employer needs to negotiate with the employees before making a decision.
Read more:
How paid Annual Leave should be calculated?
How to Calculate Annual Leave Payment on Termination of Employment Contract?
Workstem
Workstem has a number of selectable policies that can cater to your unique leave policies.
Via our Workstem One App, employees can stay with the up to date leave balance and apply for leaves without back and forth with supervisors, while supervisors are also able to manage their employees application anywhere, anytime!