From 418 to 468: Understanding the Change

Under the old “418 Rule”, employees needed to work at least 18 hours per week for four consecutive weeks with the same employer to qualify for statutory benefits, including:

• Paid annual leave
• Rest days
• Statutory holidays
• Sickness allowance
• Maternity and paternity leave
• Severance pay and long service payments

While the 418 Rule provided a clear benchmark, it excluded many workers whose hours fluctuated week to week—such as those in hospitality, retail, logistics, and casual labour—despite often working similar total hours across a month.

The new 468 Rule seeks to address this limitation by introducing two parallel eligibility criteria:

1. Weekly threshold lowered: Employees now qualify if they work 17 hours or more per week for four consecutive weeks (reduced from 18 hours).
2. New rolling total introduced: Employees also qualify if they work at least 68 hours across any four-week period, even if some individual weeks fall below 17 hours.

This dual approach widens coverage, ensuring employees with variable schedules are not unfairly excluded from statutory protections.

Why the Shift Matters

The Hong Kong government has framed the 468 Rule as a necessary update to reflect today’s evolving labour market, which increasingly relies on flexible, part-time, or gig-based work.

For employees, this reform:

• Expands access to essential statutory benefits.
• Reduces inequality between full-time and part-time staff.
• Provides greater financial security for workers with irregular schedules.

For employers, the change brings:

• Increased obligations: More workers will now qualify for statutory benefits, potentially raising labour costs.
• Administrative adjustments: Employers must update systems to track hours across rolling four-week periods rather than relying solely on weekly benchmarks.
• Greater workforce inclusivity: Businesses that rely heavily on part-time staff may benefit from improved employee morale and retention, as benefits eligibility becomes more inclusive.

Implementation Timeline

• 18 June 2025 – Legislative Council approved the amendment.
• 27 June 2025 – Rule gazetted and formally published.
• 18 January 2026 – New 468 Rule takes legal effect.

This six-month lead time provides businesses with a window to review their HR systems, contracts, and compliance processes before the rule becomes enforceable.

Key Compliance Considerations for Employers

To ensure smooth adoption of the 468 Rule, employers should take the following steps:

1. Review workforce composition
   • Identify which employees may newly qualify under the 468 Rule.
   • Pay particular attention to part-time, casual, and shift-based staff.
2. Update HR and payroll systems
   • Implement systems capable of calculating total hours over any four-week period.
   • Ensure recordkeeping is accurate and aligned with the new requirements.
3. Amend employment contracts and policies
   • Revise contracts and employee handbooks to reflect updated eligibility rules.
   • Ensure leave, severance, and benefits entitlements are applied consistently.
4. Budget for cost implications
   • Prepare for potential increases in labour costs as more employees become entitled to benefits.
   • Consider the impact on staffing models and resource planning.
5. Communicate with employees
   • Provide clear guidance on who qualifies under the new rule.
   • Manage expectations by outlining entitlements and effective dates.
6. Seek professional guidance
   • For businesses with complex workforce structures, professional payroll and compliance support may be essential to ensure full alignment with the law.

The Bigger Picture

The introduction of the 468 Rule aligns with Hong Kong’s broader labour market reforms aimed at striking a balance between business flexibility and employee protection. By widening access to benefits, the government hopes to address long-standing concerns about inequities between full-time and non-standard employment arrangements.

For international employers managing global mobility or cross-border workforces, the 468 Rule also underscores the importance of staying abreast of local employment law changes. Failure to adapt HR systems or misapply eligibility rules could expose businesses to compliance risks, penalties, or reputational damage. 

Transitioning

The transition from the 418 Rule to the 468 Rule is a landmark development in Hong Kong’s employment law, expanding eligibility for statutory benefits and bringing part-time and irregular workers into closer alignment with their full-time counterparts.

Employers should act now to:

• Audit their workforce and identify newly eligible employees.
• Update HR, payroll, and compliance systems.
• Review contracts, policies, and employee communications.

With the rule set to take effect from 18 January 2026, businesses have a clear opportunity to prepare, adapt, and ensure compliance—while supporting a fairer and more inclusive workplace.

Hong Kong - Global Insights

For further detailed guidance on payroll, employment law, and compliance in Hong Kong, visit our Hong Kong Global Insight guide on the activpayroll website. You can also explore broader regional updates and expertise in the APAC Global Expertise web section.

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