Understanding the 468 Rule in Hong Kong: What Employers and HR Teams Need to Know

Starting 18 January 2026, a key amendment to the Employment Ordinance will take effect: the introduction of the 468 Rule in Hong Kong. This new rule replaces the long-standing 418 Rule, redefining what qualifies as a continuous contract—a designation that determines employee eligibility for statutory benefits such as:

• Paid statutory holidays
• Paid annual leave
• Sick leave
• Rest days
• Maternity and paternity leave
• Severance or long service payments

Under the current 418 Rule, an employee is regarded as under a continuous contract if they work at least 18 hours per week for four consecutive weeks. The new 468 Rule shifts the benchmark to a total of 68 hours over any four-week period, regardless of weekly distribution.

This change is expected to bring many casual, part-time, and shift-based workers, who were previously excluded, under the umbrella of statutory protection.

With the working hours threshold now aggregated across four weeks, employers must reassess how they track hours and define employee eligibility under Hong Kong law.

Why the Change? The Policy Rationale Behind the 468 Rule In Hong Kong

The shift from the 418 Rule to the 468 Rule responds to years of criticism that Hong Kong’s labour framework excluded too many part-time and irregularly scheduled workers from basic protections. The government estimates that 11,000 additional workers will now qualify for benefits under the revised rule.

Previously, workers with uneven schedules—such as freelance tutors, gig workers, and event staff—could fall short of the weekly 18-hour threshold even if their total hours were substantial. The 468 Rule addresses this gap by evaluating work patterns over a rolling four-week period, which better reflects modern employment structures.

Beyond addressing fairness, this reform aligns Hong Kong labour law with global standards. Jurisdictions such as the UK and Australia already use aggregate timeframes for benefit qualification, making Hong Kong more globally consistent.

468 Rule vs. 418 Rule: The Difference At A Glance

Impact on Employers: Compliance, Costs, and Operational Adjustments

The 468 Rule carries significant implications for employers, particularly those relying on casual, shift-based, or part-time workers, such as those in retail, food and beverage, logistics, and hospitality.

Key compliance considerations include:

✅ Reassessing Employee Classifications

Review employee status to determine who newly qualifies for benefits under the 468 calculation. Some workers previously labeled as “freelancers” or “non-permanent” may now be eligible as employees with full entitlements.

✅ Adjusting HR and Payroll Systems

Businesses need systems that track working hours over rolling 4-week windows. Static weekly tracking will no longer suffice.

✅ Reviewing Contract Templates

Update employment contracts to reflect updated definitions of continuous employment, especially clauses related to leave and termination benefits.

✅ Cost Implications

Prepare for increased benefit-related costs, particularly in high-turnover part-time roles. These include severance, statutory holidays, and paid leave.

✅ Legal Risks for Non-Compliance

Failing to apply the new rule could result in penalties, back pay liabilities, and labour disputes.

✅ Interaction with Other Reforms

This rule change overlaps with other 2025–2026 reforms such as:

• Abolition of MPF offsetting
• Increase in statutory holidays
  Employers must address these changes in an integrated way.
  

How to Prepare: Checklist for HR Teams and SMEs

To stay compliant and avoid disruptions, employers—especially SMEs—should follow this practical checklist:

• ✅ Conduct an Employee Status Assessment
  Identify part-time, casual, or freelance staff nearing or exceeding 68 hours over four weeks.
• ✅ Update Time Tracking Systems
  Ensure your time and attendance systems are capable of tracking hours on a rolling 4-week basis.
• ✅ Revise Contracts and HR Policies
  Align all documentation with the new definition of continuous employment.
• ✅ Train Managers and HR Teams
  Educate teams on applying the 468 Rule and tracking benefit eligibility.
• ✅ Communicate with Affected Staff
  Inform employees who now qualify for statutory entitlements to avoid confusion or risk.
• ✅ Integrate with Broader Compliance Strategy Tie this update in with other employment law changes to streamline efforts.

Where To Next?

The 468 Rule in Hong Kong is more than a compliance update. It reflects the evolution of employment practices toward greater flexibility, fairness, and transparency. Businesses that adapt early will benefit through:

• Improved workforce morale
• Stronger legal protection
• Greater operational resilience

If you’re unsure how to update contracts, assess worker eligibility, or realign your HR policies with the latest reforms—including the abolition of MPF offsetting and expanded statutory holidays—InCorp Hong Kong is here to help.

Our team supports SMEs and multinational companies in:

• Employer’s statutory compliance reviews
• Employment contract updates
• HR policy development and rollout
• HR systems compliance assessments

👉 Contact InCorp Hong Kong today to future-proof your employment strategy and stay ahead of compliance risks.