The 418 Rule Became the 468 Rule: What Hong Kong SMEs Need to Change
Since 18 January 2026 the Employment Ordinance's 'continuous contract' test is 4 weeks and 17 hours a week — or 68 hours over 4 weeks. What that means for part-timers, payroll and your records.
For decades, Hong Kong HR shorthand for "is this person entitled to statutory benefits?" was the 418 rule: employed by the same employer for 4 weeks or more, working at least 18 hours in each of those weeks. Since 18 January 2026 the test has changed. This article explains what the new requirement says, who it affects in practice, and what an SME should check in its payroll and rostering.
This article is general information for reference only and does not constitute legal advice. Wording quoted below is from the Labour Department; the Ordinance itself governs.
What the Employment Ordinance now says
The Employment (Amendment) Ordinance 2025 was passed by the Legislative Council on 18 June 2025 and applies from 18 January 2026. Under the revised requirement, an employee is employed under a "continuous contract" if:
- "the employee has been employed continuously by the same employer for four weeks or more", and
- one of two working-hours tests is met:
- "he has worked for at least 17 hours in each week"; or
- "he has worked for 68 hours or more in a four-week period".
Two things changed. The weekly threshold dropped from 18 hours to 17. More importantly, a second route was added: if an employee's hours dip below 17 in a given week, they can still qualify if the four-week block ending in that week adds up to 68 hours or more. That is where the nickname "468" comes from — four weeks, 68 hours.
The Labour Department is explicit that the burden sits with the employer: "In any dispute as to whether a contract of employment is a 'continuous contract', the onus of proving that it is not a 'continuous contract' shall be on the employer."
What did not change
- Employment periods before 18 January 2026 are still assessed under the old test — four weeks or more with at least 18 hours each week.
- The qualifying periods for individual benefits are unchanged. Continuous contract is the gateway; each benefit still has its own service condition.
Why it matters: what "continuous contract" unlocks
Under the Employment Ordinance, being on a continuous contract is the condition for most statutory benefits. Broadly, and subject to each benefit's own qualifying period:
| Benefit | Qualifying condition (in addition to continuous contract) |
|---|---|
| Rest days | Continuous contract |
| Statutory holiday pay | 3 months' continuous employment before the holiday |
| Paid annual leave | 12 months' continuous employment |
| Sickness allowance | Continuous contract, plus the sickness-day accrual rules |
| Maternity / paternity leave pay | 40 weeks' continuous employment |
| Severance payment | 24 months' continuous employment |
| Long service payment | 5 years' continuous employment |
An employee who used to be excluded because one quiet week fell to 16 hours may now be inside the scheme. For an SME with part-timers, that is the whole story.
Who is actually affected
The change bites where hours are variable and modest — typically:
- Part-time staff in retail, F&B, clinics, tuition centres and studios, rostered around demand.
- Student or "weekend only" staff who work three long shifts one week and one short shift the next.
- Office part-timers on a nominal 15–16 hours a week who regularly cover extra hours.
A worked example. A part-timer works 20, 20, 20 and then 12 hours over four consecutive weeks. Under the old rule, the 12-hour week breaks continuity — the four-week count restarts. Under the new rule, the four-week block ending in that week (20 + 20 + 20 + 12) totals 72 hours, so the test is met and the contract continues.
Full-time monthly-paid employees are unaffected in practice; they were always well above the threshold.
What an SME should check now
1. Do you actually know weekly hours for every part-timer? The 68-hour route is computed on a rolling four-week window ending in each week. If your rota lives in a group chat and your timesheets are monthly, you cannot answer the question. Weekly hours per person, with dates, is now a core payroll record — not just an attendance nicety.
2. Re-run the test for everyone hired since 18 January 2026. Anyone you have been treating as "casual, no benefits" should be re-checked against both routes. If they qualify, statutory holiday pay, annual leave accrual and rest days apply from the point they qualify — with the benefit-specific service periods counted from then.
3. Fix the contract wording. Older part-time contracts often say the employee is "not employed under a continuous contract" as a statement of fact. That statement does not decide anything — the hours do — and it is now more likely to be wrong. Describe the working pattern; do not assert the legal conclusion.
4. Check your payroll system's holiday-pay and annual-leave logic. Most Hong Kong payroll software has a "continuous contract" flag per employee. If the flag is set manually, someone has to set it when a part-timer crosses the line. If the system calculates it, confirm the vendor has updated the logic to the 17-hour / 68-hour test, and that it is using weekly hours as the input.
5. Budget for it. For a business with a large part-time workforce, more people on statutory holiday pay and annual leave is a real cost line. Quantify it from the last three months of rosters rather than guessing.
How the transition works
The Government's guidance is that "for an employment period before the new requirement is applicable, an employee is still required to be employed continuously by the same employer for four weeks or more and has worked for at least 18 hours or more each week". In other words, weeks before 18 January 2026 are judged by the old test and weeks from that date by the new one. An employee who was already on a continuous contract under the old test carries on; an employee whose earlier weeks did not qualify starts building the four-week period under the new test from January 2026.
Where to check the source
- Labour Department dedicated page: labour.gov.hk/eng/news/EAO2025.htm
- Government press release, 29 December 2025: info.gov.hk
- Labour Department 24-hour enquiry hotline: 2717 1771
If your rosters, contracts and payroll flags have not been looked at together since the change, that is exactly the kind of review our HR Re-structuring / Health Check is built for.