For over 30 years, the 418 policy has served as a benchmark for worker protection in Hong Kong, defining the threshold for part-time or non-continuous employment. However, concerns have arisen regarding the exploitation of loopholes by some employers, preventing part-time workers from receiving the benefits they deserve. This has led to the discussion and agreement of a new policy, the 468 policy. In this blog post, we will explore the key aspects of the 418 policy, delve into the improvements offered by the 468 rule, as well as discuss any concerns and potential impact on various industries associated with this transition.
Understanding the 418 Policy
The current 418 rule sets a threshold that defines part-time or non-continuous employment. Employees who have worked for a company for at least four weeks, for a minimum of 18 hours per week, are considered to be engaged under a “continuous contract.” It serves as a benchmark for worker protection, providing certain rights and benefits to employees who meet this requirement, including statutory holiday pay, paid annual leave and sickness allowance. The rule was designed to strike a balance between the flexibility needed by employers and the need to ensure that workers receive adequate protections.
The transition to 468
Under the current rule, some employers have been exploiting a loophole by manipulating working hours in a way that prevents employees from reaching the 18-hour threshold in the fourth week, thereby avoiding the obligation to provide benefits. This practice has raised concerns about the rights and welfare of part-time workers.
To address this issue, the Labour Advisory Board (LAB), which consists of representatives from both employees and employers, has agreed to lower the threshold by four hours, making it 68 working hours over a four-week period instead. This change aims to ensure that part-time workers receive appropriate benefits by calculating their working hours on an aggregate basis rather than a weekly basis.
These adjustments seek to close the loophole and provide better protection for part-time workers in Hong Kong, ensuring they receive the benefits they are entitled to under the revised labor rules.
The advantages of 468 over 418
Wider cover: The new rule can provide benefits for workers with irregular schedules or those who may not consistently meet the requirements under the current rule. For example, person A worked more than 18 hours per week for weeks 1, 2 and 4, but he didn't work in the third week. Under the 418-hour rule, person A would not have met the continuous employment criteria because they didn't work in the third week. However, under the 468 rule, person A would still qualify as a continuous worker since they worked a total of 68 hours over the four-week period. By considering the total hours worked over a four-week period rather than focusing solely on a consecutive weekly basis, the 468 rule can encompass a wider range of workers and accommodate those with irregular or non-traditional schedules.
Attracting and Retaining Talent: In a time where many industries are facing a shortage of labor, the change to 468 rule offers workers access to benefits and entitlements at a lower threshold, allowing employers to attract and retain higher-quality part-time workers. Providing such benefits can make job positions more attractive, leading to a larger pool of qualified candidates. This, in turn, can positively impact productivity, customer service, and overall business performance.
Reduced Turnover and Training Costs: Providing benefits and entitlements can help reduce turnover rates among part-time workers. When employees have access to benefits, they may be more inclined to stay with the company for longer periods, reducing the need for frequent recruitment and training. This can lead to cost savings in terms of recruitment expenses and productivity losses associated with employee turnover.
Perceived Impact on Local Industries
Despite the perceived benefits, notable persons from multiple industries have their doubts over the wider effects of the new policy. Concerns have been raised by representatives from the catering and retail sectors regarding the proposed amendments. Peter Shiu, a lawmaker representing the wholesale and retail sector, expressed that it is not the appropriate time to amend part-time work legislation, especially considering the current challenges faced by the local retail sector, such as declining sales and rising operational costs, introducing changes that could potentially increase their financial burden is seen as ill-advised.
Simon Wong, the president of the Hong Kong Federation of Restaurants and Related Trades, also highlighted the potential consequence of increased labor costs for small and medium-sized eateries, which are operating on thin profit margins, and may find it challenging to absorb the increased expenses associated with implementing the proposed regulations.
There have also been concerns from part time workers, who pointed out that the current loopholes will persist. Under the current 418 policy, employers often permit part-time workers to work unlimited hours for three weeks, but restrict their working hours to less than 18 for the fourth week or intermittently throughout the four-week period. This strategy ensures that the worker does not meet the threshold for continuous employment and exempts the employer from providing additional benefits.
Given that the 468 policy operates similarly, with a total limit of 68 hours worked over four weeks and no weekly limits, it is reasonable to assume that employers may continue this practice. However, under the new policy, part-time workers will be limited to fewer hours worked and thus earn less from a single job. Consequently, they may be compelled to seek additional employment, and employers will need to hire more workers to compensate for the decreased output from each part-time employee. Considering the perceived benefits and potential drawbacks, it is imperative for lawmakers to closely monitor the implementation of the 468 policy and evaluate its impact on various stakeholders to ensure its effectiveness and address any unintended consequences.
Despite the concerns raised by some representatives from the catering and retail sectors, it is crucial to recognize the intended purpose of the proposed amendments, which is to further safeguard the rights and welfare of part-time workers. While there may be initial challenges for businesses in adjusting to the new regulations, employers can ensure fair treatment, improved working conditions, and better job security for part-time workers in the long run. This not only fosters a more inclusive and equitable work environment but also enhances employee loyalty and productivity. Companies that embrace these changes demonstrate their commitment to supporting their workforce and contribute to the overall welfare of the community.
In addition, organizations can leverage tools to assist in effectively monitoring and implementing the new threshold. One such solution is BridgeBuilder HRMS. BridgeBuilder HRMS simplifies the tracking of working hours and ensures accurate data collection for determining eligibility under the revised policy. With its existing capabilities to comply with the 418 policy, it is ready to comply with the new policy with an update. By adopting BridgeBuilder HRMS, organizations can navigate the transition to the 468 rule with greater ease and confidence, as it provides reliable support in managing worker protection policies.