The year 2025 has seen significant developments in employment law in Hong Kong. This article provides a quick glance at the major changes introduced during the year and offers insights into anticipated changes as we transition further into 2026.
To read more about all the key updates, please click here for the full version of this article.
- January: Six visa categories move to online-only applications. Click here to read more.
- February:
- The District Court admits secret recordings as evidence in a sexual harassment claim. Click here to read more.
- The Government introduces a two-tiered fee structure in respect of visa applications under major talent and investment schemes. Click here to read more.
- March:
- April:
- The High Court clarifies the scope of marital status discrimination. Click here to read more.
- The High Court holds that a former employee could be in breach of non-solicitation covenant even without initiating contact with clients. Click here to read more.
- May:
- The Mandatory Provident Fund offsetting mechanism is abolished. Click here to read more.
- The statutory minimum wage and monthly cap for record keeping purposes are increased. Click here to read more.
- The High Court reaffirms the narrow scope of frustration in the employment context. Click here to read more.
- June:
- The definition of “continuous contract” is revised and expected to expand employee eligibility for statutory benefits, effective 18 January 2026. Click here to read more.
- The High Court reiterates the high threshold for justifying a summary dismissal. Click here to read more.
- The Legislative Council passes amendments to trade union laws, effective 5 January 2026. Click here to read more.
- The Government introduces new visa arrangement to attract non-degree technical professionals. Click here to read more.
- July: The Hong Kong Association of Banks and the DTC Association issue Guidelines on Phase 2 of the Mandatory Reference Checking Scheme (MRC Scheme). Click here to read more.
- August: The District Court hands down a decision which clarifies when psychiatric trauma would qualify as a workplace injury under the Employees’ Compensation Ordinance (Cap. 282). Click here to read more.
- September:
- The High Court holds an app‑based delivery platform to be in breach of the employer’s duty to provide a safe system of work during Typhoon Signal No. 8. Click here to read more.
- The Legislative Council votes down the Registration of Same-sex Partnerships Bill. Click here to read more.
- The Chief Executive announces employee protection enhancements and employment-related updates in the 2025 Policy Address. Click here to read more.
- The Government announces increase to the minimum allowable wage for foreign domestic workers. Click here to read more.
- Phase 2 of the MRC is implemented. Click here to read more.
2026 Outlook – click here to read more.
The anticipated changes to Hong Kong employment law in 2026 include:
- the amendments to the Trade Union Ordinance, effective 5 January 2026,
- the revised definition of “continuous contract”, effective 18 January 2026,
- Easter Monday becoming the newly added statutory holiday;
- the new formula for statutory minimum wage, expected to take effect from 1 May 2026; and
- upcoming government initiatives to promote employee protection and workplace development.
2025 Year in Review / 2026 Look Forward – Hong Kong Employment Law
The year 2025 has seen significant developments in employment law in Hong Kong. This article outlines the major changes introduced during the year and offers insights into anticipated updates as we transition into 2026.
January
From 17 January 2025, the application for six categories of visa permits and extensions of stay must be submitted using online services, including the General Employment Policy (including both employment and investment as entrepreneurs) and Admission Scheme for Mainland Talents and Professionals categories. Applications submitted in person, by post, or drop-in box are no longer accepted.
This process is intended to be more convenient and efficient for employers and employees, as there is no need to visit the Immigration Office in person. Nonetheless, when applying online for an extension of stay, the applicant must still physically be present in Hong Kong at the time of submission and collection of the e-visa.
February
On 14 February 2025, the District Court handed down a decision in favour of an Indonesian domestic worker in her sexual harassment claim against her former male employer. In Sri Wahyuni v Lam Yui Sang [2025] HKDC 271, the Court accepted secret recordings as evidence revealing various sexual requests from the employer and found that the employer had sexually harassed the worker and created a hostile or intimidating work environment. The worker was awarded compensation including for loss of income, damages for injury to feelings, exemplary damages, and legal costs, due to the severity of the employer’s actions and the lack of merit in his defence.
While an extreme case, it serves as a reminder that the Court will prioritise fairness and justice over the usual rules of evidence in sexual harassment cases, and employers should be aware of the potential legal and financial consequences of failing to prevent and address sexual harassment in the workplace.
From 26 February 2025, a new two-tiered fee structure came into effect in respect of visa applications under various schemes[1]. Applicants must pay a non-refundable application fee of HK$600 and, if the application is successful, a visa issuance fee of HK$1,300 for visas of over 180 days or HK$600 for visas of less than 180 days.
March
On 1 March 2025, the following enhancement measures for the New Capital Investment Entrance Scheme (an investment immigration scheme aimed at attracting high-net-worth individuals to Hong Kong and strengthening the development of the finance industry) came into effect:
- The time frame for meeting the net asset requirement of a minimum of HK$30 million was shortened from 2 years to just 6 months prior to the application;
- Assets jointly owned with the applicant’s family members can be included in the calculation of the net asset requirement; and
- The permissible investment(s) under the scheme can be made through an eligible private company wholly owned by the applicant.
On 31 March 2025, the Office of the Privacy Commissioner for Personal Data issued a Checklist on Guidelines for the Use of Generative AI by Employees, to support responsible use of Generative Artificial Intelligence (Gen AI) in the workplace. The checklist is designed to help organisations develop workplace policies for Gen AI and sets out a practical framework for the safe and accountable use of Gen AI in the workplace. It defines the scope and applicability, identifies approved tools, and outlines permissible use cases for Gen AI. It sets expectations for personal data protection, lawful and ethical use, and bias mitigation for Gen AI. It provides guidance on data security and recommends that the workplace policies specify the consequences for violating the guidelines on the use of Gen AI. It also offers practical tips to help employees use Generative AI tools effectively. While the checklist is not legally binding itself, employers may wish to take it into account when devising internal Gen AI policies, particularly to ensure the policies are compliant with Hong Kong data privacy legislation.
April
On 7 April 2025, the High Court dismissed a former employee’s claim that her former employer had unlawfully terminated her agency agreement due to her marital status. In Cheuk Kit Man v FWD Life Insurance Company (Bermuda) Limited and Others [2025] HKCFI 1369, the former employee and her husband both worked for the same company, a licensed insurer, as insurance agents. Shortly after her husband’s resignation, the former employee was dismissed by the company without any apparent reason. The former employee claimed that the dismissal was due to (among other things) her marital status, which was unlawful under the Sex Discrimination Ordinance (Cap. 480). The Court found that the termination was due to the identity of her husband and the fact that she was married to him, but not because of her status of being married, and, as such, it did not constitute marital discrimination under the Sex Discrimination Ordinance.
The judgment clarifies the scope of marital status discrimination in Hong Kong – it relates to decisions driven by an individual’s marital status (i.e. single/married/married but living separately from the spouse/divorced/widowed), rather than who the employee is married to / divorced from, etc. Nonetheless, employers should exercise caution when making employment-related decisions that are not solely based on conduct or performance, in order to avoid disputes that relate to any protected attributes in Hong Kong.
On 11 April 2025 and 25 April 2025, the High Court rendered two related judgments in which it considered whether a former deputy general manager had breached their post-termination restrictive covenants after setting up a new shop and seeking to secure a major contract with one of their former employer’s key clients. In Info Salons Technology Services (HK) Limited v Feng Wenguo & Ors [2025] HKCFI 1663 and [2025] HKEC 1718, while the Court had initially denied an interim injunction filed by the former employer against the former deputy general manager, it later reversed this decision, finding there were serious issues to be tried, and the balance of convenience favoured the employer. Importantly, the Court adopted an English legal principle, holding that a breach of a non-solicitation clause can still occur even if the former employee did not initiate contact – what matters is the overall context and whether the employee had engaged with the customer actively.
This case demonstrates the Court’s willingness to hold parties to their contractual bargain and enforce post-termination restrictive covenants at the interlocutory stage. Former employees subject to post-termination restrictive covenants should therefore think carefully before potentially acting in competition or dealing with the clients of their former employer. Even without initiating contact, they could still be considered in breach of the non-solicitation of clients covenants.
May
Effective 1 May 2025, employers can no longer use an employee’s accrued Mandatory Provident Fund (MPF) benefits derived from mandatory employer contributions to offset any statutory severance or long service payments due on termination. Offsetting against employers’ voluntary contributions is, nonetheless, still permitted.
A “grandfathering” arrangement has been implemented, where the pre-transition portion of statutory severance / long service payment for employees already in employment before the transition date can still be offset using the previous rules. The government has also launched a 25-year subsidy scheme exceeding HK$33 billion to ease the transition and financial burden on employers.
Accordingly, employers should review and update HR systems, policies, handbooks, and employment contracts to ensure compliance with the change. HR teams should receive training on the new rules and maintain proper wage records, especially for employees hired before 1 May 2025. Eligible employers should also consider applying to the government subsidy scheme to benefit from the available support. Details of the subsidy scheme can be accessed here.
Also on 1 May 2025, the statutory minimum wage (SMW) was raised from HK$40 per hour to HK$42.10, representing a 5.25% increase. This is the first review of the SMW following the Chief Executive’s announcement to implement an annual review mechanism in his 2024 Policy Address. Employers should adopt the revised SMW rate and make any necessary adjustments to payroll arrangements and employment terms.
On 20 May 2025, the High Court in Stahl Matthew Ian v Brilliant Jet Limited [2025] HKCFI 2013 reaffirmed the narrow scope of frustration in employment, and set aside the Labour Tribunal’s contrary ruling. The Plaintiff was engaged by the Defendant, a business aviation management services company, as a private jet pilot based in Shanghai. During COVID-19, the Plaintiff could not re-enter the Mainland, because he only held a China business visa and was unsuccessful in his first Type C crew visa application (which would have enabled him to re-enter China). The Defendant therefore summarily dismissed the Plaintiff on the grounds that (i) he had failed to obtain the necessary permits to perform his job, (ii) he was not based in Shanghai, and (iii) he had incurred unauthorised travel expenses. At the Labour Tribunal, the Deputy Presiding Officer considered that summary dismissal was unjustified. Instead, she found that the employment contract had ended based on the doctrine of frustration. However, on appeal, the ruling of contract frustration was set aside by the High Court, which held that performance of his employment contract remained possible – the contract permitted worldwide deployment and relocation and, also, it was not impossible (although uncertain) for the Plaintiff to successfully obtain a Type C visa on a further attempt. The Court therefore held that the employment contract was not frustrated.
This case reiterates that frustration of an employment contract applies in very limited circumstances, where an unforeseen, supervening event renders performance genuinely impossible (not merely difficult or uncertain). Before attempting to rely on the doctrine of frustration, employers are recommended to carefully review the contractual clauses (especially discretionary provisions) and assess whether there are alternative means of performance of the contract.
June
On 18 June 2025, the Legislative Council passed the Employment (Amendment) Bill 2025 which lowers the threshold of what constitutes a “continuous contract”. With effect from 18 January 2026, an employee will be deemed employed under a “continuous contract” if they work for at least 17 hours for four consecutive weeks (the previous threshold was 18 hours for four consecutive weeks) or for an aggregate of 68 hours over four weeks, with the same employer.
The revised definition should increase the number of employees who will meet the “continuous contract” threshold and who will therefore become entitled to the enhanced benefits under the Employment Ordinance, including rest days, paid annual leave, sickness allowance, severance payment, and long service payment, etc. Employers are recommended to review their workforce and employment terms, and plan for a potential increase in labour costs. Employment contracts and policies should also be updated to reflect the new definition of “continuous contract.”
Also on 18 June 2025, the Court of First Instance rendered a decision in the case of Hu Yangyong v. Alba Asia Limited [2025] HKCFI 2484 and held that the company had wrongfully dismissed the former employee for alleged misconduct and dishonesty related to expense reimbursements. The Court found that the former employee had genuinely incurred the expenses and that there was no evidence of dishonesty or fraudulent intent. The Court emphasised that one act of dishonesty does not automatically justify summary dismissal, as there are varying degrees of dishonesty.
This case reinforces the fact that summary dismissal is justifiable only in exceptional circumstances. Employers bear the burden of establishing that summary dismissal is justified, which will be a matter of fact.
On 25 June 2025, the Legislative Council passed the Trade Unions (Amendment) Bill 2025, which aims to better safeguard national security and enhance the regulatory regime for trade unions in Hong Kong. In particular, the Bill strengthens and expands the Registrar of Trade Unions’ statutory powers, so that it may reject trade union registrations on national security grounds, impose restrictions on contributions to trade unions from “external forces” (i.e., foreign governments, authorities, political parties, international organisations and their related bodies or individuals), and adjust penalties for offences.
These amendments, which took effect on 5 January 2026, significantly reshape what constitutes lawful trade union activities in Hong Kong and increase penalties for persons found to be endangering national security. Employers should assess and update any applicable policies concerning employee associations and trade unions to take account of these changes.
Effective from 30 June 2025, non-degree technical professionals aged between 18 and 40 will be able to apply for entry into Hong Kong to join eight specified skilled trades[2]. Interested applicants who meet the requirements set out in the Technical Professional List can apply for visas via a new channel to be implemented under the General Employment Policy and the Admission Scheme for Mainland Talents and Professional. This new arrangement will be on pilot for three years, with an overall quota of 10,000 for this period. The quota for each skilled trade is limited to 3,000.
The arrangement is intended to ease the acute manpower shortages in the specified skilled trades that the Government considers cannot be replenished locally over the next five year period, as well as attract mid-level qualified and experienced non-degree technical professionals to settle in Hong Kong.
July
On 24 July 2025, the Hong Kong Association of Banks and the DTC Association issued the Guidelines on Phase 2 of the Mandatory Reference Checking Scheme (MRC Scheme)[3], which was endorsed by the Hong Kong Monetary Authority. Phase 2 of the MRC Scheme was launched on 30 September 2025 and substantially widened the coverage to include staff who are licensed or registered to carry out securities, insurance or MPF regulated activities under the Securities and Futures Ordinance (Cap. 571), the Insurance Ordinance (Cap. 41) and/or the Mandatory Provident Fund Schemes Ordinance (Cap. 485). Under the MRC Scheme, authorized institutions must now identify roles that fall within the scope of Phase 2 of the MRC Scheme and update employment document templates, recruitment and HR policies to ensure that those roles are conditional upon obtaining satisfactory results from the MRC Scheme.
August
On 13 August 2025, the District Court handed down a decision which clarified when psychiatric trauma would qualify as a workplace injury under the Employees’ Compensation Ordinance (Cap. 282) (ECO). In Chan Man Sau v 風采中學（教育評議會主辦）法團校董會 [2025] HKDC 1354, the Plaintiff, a secondary school teacher, commenced six employees’ compensation proceedings against his employer, four of which concerned psychiatric trauma that the Plaintiff claimed (among other things) was caused by the verbal exchanges with, and comments made by, various staff members, the school principal, and students of the Defendant.
The Court opined that, to qualify as a workplace injury under the ECO, the comments and remarks must (i) constitute an accident, i.e. they must be of an “unusual and improper” (“不一般、不適宜的”) nature and must have happened “suddenly and unfortunately” (“突然發生且不幸的”), and (ii) result in psychiatric trauma. In this case, the Court considered that the events complained of by the Plaintiff either did not constitute an accident or were factually unsubstantiated and dismissed all four claims.
While routine workplace friction or ordinary criticism are generally unlikely to constitute an accident causing psychiatric harm or workplace injury under the ECO, as a matter of good practice, employers should reinforce respectful workplace conduct to foster a positive culture and support employees’ mental health, which could also prevent escalation of events giving rise to harassment allegations or psychiatric injury claims.
September
On 3 September 2025, the High Court rendered a landmark judgment which held that an app-based delivery platform was liable for the injuries suffered by a delivery rider during Typhoon Signal No. 8.
In Khan Farooq Ahmed v Delivery Hero Food Hong Kong Limited [2025] HKCFI 4030, a Foodpanda rider was injured riding home after completing his last order during Typhoon Signal No. 8 (T8). Although Foodpanda had sent Telegram and in‑app suspension messages around the hoisting of T8, riders mid‑delivery were told to decide whether or not to continue “based on [their] safety”. The Court held that these messages conflicted with (i) the terms of the employment contract which required the continuation of deliveries once T8 was hoisted, and (ii) Foodpanda’s expectation for riders to complete pre‑T8 orders. The Court also said that Foodpanda had failed to promptly shut down its automated system, which had continued to send orders to the riders, and allowed riders to receive and accept new orders, shortly before T8 was hoisted. Accordingly, the Court found the system of work to be unsafe, and that riders were exposed to unnecessary risk under T8 conditions. Foodpanda was found to be in breach of common law and contractual duties, occupational health and safety obligations, and the Labour Department’s Code of Practice in times of Typhoon and Rainstorms, and was found 80% liable for the rider’s injuries.
This decision highlights the importance of employers needing to provide a safe system of work, which is a non-delegable duty under common law. Employers should ensure that adverse‑weather planning is real‑time and effective, with clear suspension triggers, enforceable directions for ongoing orders, robust communications, and contract terms aligned with statutory and Code obligations and best practices. Any incentives or messaging that could be perceived as pressuring employees to continue working in hazardous conditions should be avoided.
On 10 September 2025, the Legislative Council voted down the Registration of Same-sex Partnerships Bill, which was proposed by the Government following the 2023 Court of Final Appeal decision in Sham Tsz Kit v Secretary for Justice [2023] HKCFA 28[4], and which aimed to establish a regime for the registration of same-sex partnerships and grant specified rights to same-sex couples. In a press release, the Government stated that, accordingly, it would not apply to the Court for an extension of the two-year period granted by the Court of Final Appeal (to put in place an alternative legal framework to recognise and provide new legal protections to same-sex couples), and would review the issue further with the Department of Justice.
On 17 September 2025, the Hong Kong Chief Executive delivered his 2025 Policy Address, in which various measures aimed at enhancing employee protection were announced, reiterated and/or emphasised. These included:
- ensuring the employment priority of local workers and combating abuse of the Enhanced Supplementary Labour Scheme (ESLS)[5], including extending the local recruitment process from four to six weeks, requiring weekly Labour Department on-site job fairs, and tightening the manning ratio calculations for waiters/waitresses and junior cooks;
- enhancement actions against illegal employment, including setting up a dedicated reporting hotline and strengthening intelligence collection and inter‑departmental joint enforcement operations;
- a reform of the Employees Retraining Board (ERB), aimed at assisting members of the workforce to enhance their skills and competitiveness, over the next three years, which includes strengthening industry consultation, establishing a skills-based training framework, collaborating with higher education and other training bodies, launching industry-recognised micro-credential courses, and expanding flexible learning by utilising technology;
- the continuation of the Re‑employment Allowance Pilot Scheme and the Employment Programme for the Elderly and Middle-aged, aimed at promoting re-employment and silver employment;
- the adoption of the new formula‑based annual review mechanism for the Statutory Minimum Wage, with the first rate under the mechanism expected to take effect on 1 May 2026;
- the enhancement of the protection of digital platform workers by legislating to improve work injury compensation and continuing engagement via the Tripartite Committee for the Digital Platform Industry; and
- the enhancement of occupational safety and health through intensified inspection and enforcement, promotion and training, greater use of innovative technologies and artificial intelligence and supporting industry development of technology products that improve occupational safety and health.
Other key points relevant to employment in the Policy Address included (a) a continued emphasis on fostering a family-friendly culture in the workplace; (b) enhancing employment support for ethnic minorities; (c) promoting youth development; (d) sustaining progress in talent admission; (d) strengthening talent exchanges among the industry, academic and research sectors; (e) pursuing mutual recognition of sub‑degree vocational and professional qualifications with the Mainland; and (f) attracting emerging industries and training relevant talents.
On 29 September 2025, the government announced that the minimum allowable wage (MAW) for foreign domestic workers (FDW) in Hong Kong will increase by 2.2 per cent per month, from HK$4,990 to HK$5,100. The food allowance, which is required if an employer does not provide food to the FDW free of charge, remains unchanged. The new MAW will apply to all FDH contracts signed on or after 30 September 2025.
On 30 September 2025, Phase 2 of the MRC Scheme was implemented. Please see above for further details.
2026 Outlook
Looking ahead, we continue to anticipate various developments and changes in the employment law landscape in 2026, including the following:
- The amendments to the Trade Union Ordinance took effect on 5 January 2026 (please see above for further details);
- The revised definition of “continuous contract” took effect on 18 January 2026 (please see above for further details);
- Easter Monday will be added as a new statutory holiday;
- The new formula for statutory minimum wage is expected to take effect from 1 May 2026;
- As announced in the 2025 Policy Address, further government measures and initiatives aimed at enhancing employee protection and workplace development are expected.
[1] Namely, the Top Talent Pass Scheme, General Employment Policy, Admission Scheme for Mainland Talents and Professionals, Quality Migrant Admission Scheme, Immigration Arrangements for Non-local Graduates, Admission Scheme for the Second Generation of Chinese Hong Kong Permanent Residents, New Capital Investment Entrant Scheme, Capital Investment Entrant Scheme, Technology Talent Admission Scheme and Vocational Professionals Admission Scheme.
[2] Namely, new industrialisation technicians, nurses, aircraft maintenance technicians, marine services technicians (for local vessels), information technology technicians, lift/escalator technicians, building information modeling coordinators and electrical technicians.
[3] The MRC Scheme seeks to address the “rolling bad apples” phenomenon by requiring authorized institutions to share seven years of conduct-related information when recruiting for specified roles. Phase 1 of the MRC Scheme, which covered senior positions, was implemented in May 2023.
[4] In this case, the Court of Final Appeal required the Government to establish an alternative legal framework to recognise same-sex relationships and create new legal protections for same-sex couples by October 2025, failing which the Government would be held by the Court of Final Appeal to be in breach of the constitutional right to privacy.
[5] The ESLS was implemented in September 2023 and allows employers to hire imported workers at or below technician level, when they are unable to hire locally. According to a Government press release, as of 31 December 2025, the Labour Department received a total of 832 complaints regarding abuses and violations of the ESLS, and imposed administrative sanctions on 24 employers.
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