Long service computation is a topic that interests primarily domestic workers who have served their employers for no less than five years.
As of October 1, 2022, newly hired foreign domestic helpers in Hong Kong are entitled to a minimum allowable wage of HK$4,730 per month. But if the working relationship between the helper and her employers deteriorates under incompetence, or incapacity to perform duties, termination of the employment contract is one route either party can undertake.
Termination of employment contract
Either party may terminate the employment contract by giving one month’s notice or one month’s payment in place of notice to the other party.
Termination payments may include:
- Unpaid salary
- Payment instead of notice, if any;
- Payment in place of any annual leave not availed by helper;
- Long service payment/severance payment, where appropriate; and
- Any other sum under the employment contract, e.g. free return passage, food, and travelling allowance, etc.
A foreign domestic helper is entitled to a severance payment if he/she:
- has not less than 24 months of service with the same employer before the termination; and
- is dismissed or the contract is not renewed because of redundancy.
Long Service Payment
A foreign domestic helper is entitled to long service payment if he/she has no less than 5 years of service with the same employer before the termination and:
- is dismissed or the contract is not being renewed by reason other than serious misconduct or redundancy;
- resigns on grounds of ill health;
- resigns on the ground of old age (i.e. aged 65 or above); or
- dies in service.
Amount of severance payment or long service payment
Monthly wages x 2/3 x years of service
For example, assuming the domestic helper has received HK$4,730 monthly salary across three employment contracts spanning six years:
Long service = HK$4,730 x (2/3) x 6 years
Long service = HK$18,920 payable to domestic helper
The service of the incomplete year should be calculated on a pro-rata basis.
A foreign domestic helper is only entitled to severance or long service payments.
Using the current (HK$4,730) salary of Hong Kong domestic helpers:
|Number of Years in Service||Long Service Payment|
Inquiry Hotline: 2-71-71-771(the hotline is handled by “1823”)
Homepage Address: http://www.labour.gov.hk
Employer’s written statement on the computation of long service payment
In Hong Kong, employers must provide a written statement to domestic helpers regarding the computation of long service payments. This statement must include the following information:
- Dates of Employment: The start and end dates of the domestic helper’s period of service with the employer must be included in the written statement.
- Salary at Termination: The monthly salary of the domestic helper at the time of termination must be included in the written statement.
- Calculation of Long Service Payment: The written statement must include a calculation of the extended service payment based on the domestic helper’s monthly salary at the time of termination. The calculation should be based on one-twelfth of the total salary the domestic helper earns in the preceding 12 months, multiplied by the number of years of service.
- Other Deductions: Any deductions from the long service payment, such as taxes or outstanding loans, must be specified in the written statement.
- Date of Payment: The date by which the employer must pay the long service payment, which is within seven days of the termination of the employment contract, must be included in the written statement.
How can domestic helpers pursue legal means if employers refuse to pay long service payments?
If a domestic helper in Hong Kong believes that they are entitled to a long service payment, but their employer refuses to pay, there are several steps they can take to resolve the dispute:
- Negotiation: The domestic helper can try negotiating with their employer to resolve the dispute. They can provide the employer with a written statement showing how the long service payment has been calculated and explain why they believe they are entitled to it. If the employer agrees, they can pay, and the matter can be resolved.
- Mediation: If negotiation fails, the domestic helper can seek assistance from the Labour Department in Hong Kong. The Labour Department can help to mediate the dispute between the domestic helper and the employer and assist in settling.
- Legal Action: If mediation fails, the domestic helper can consider taking legal action against their employer. They can seek legal advice from a solicitor or contact the Equal Opportunities Commission in Hong Kong for assistance.
Labour Department’s enforcement of long service payment in Hong Kong
The Labour Department in Hong Kong plays a crucial role in enforcing long-service payment laws for domestic helpers. The department is responsible for enforcing the Employment Ordinance, which sets out the legal requirements for long-service payment.
Here are some specific ways in which the Labour Department enforces long-service payment laws:
- Inspection and Investigation: The Labour Department conducts regular inspections to ensure employers comply with long-service payment laws. Employers who are found to violate the law may be subject to legal penalties and fines.
- Mediation and Dispute Resolution: If a domestic helper has a dispute with their employer over a long service payment, they can seek assistance from the Labour Department. The department provides mediation and dispute resolution services and can help to resolve disputes between the domestic helper and the employer.
- Education and Outreach: The Labour Department also provides education and outreach to domestic helpers and employers to ensure they know their rights and obligations regarding long service payment. This includes providing information on calculating long service payment, when it is due, and what to do if a dispute arises.
- Prosecution: In cases where an employer has repeatedly violated long-service payment laws or refuses to comply with orders from the Labour Department, the department may prosecute the employer in court.
In conclusion, the long-service payment system for domestic helpers in Hong Kong is essential to recognize and reward their years of dedicated service to their employers.
The law stipulates that employers must provide a long-service payment to domestic helpers who have worked for them for five years or more. The payment is based on a formula that considers the domestic helper’s monthly salary and years of service.
Domestic helpers who believe they are entitled to a long service payment but have not received one can seek assistance from the Labour Department, which is responsible for enforcing the law and providing dispute resolution services. By ensuring that domestic helpers are fairly compensated for their long and continuous service, Hong Kong can continue attracting and retaining highly skilled and experienced workers worldwide.