Introduction
On 27 June 2025, the Employment (Amendment) Ordinance 2025 ("Amendment Ordinance") was gazetted.
Under the Amendment Ordinance, the "continuous contract" requirement under the Employment Ordinance (Cap. 57) will be revised with effect from 18 January 2026, where the old "418 rule" will be replaced by the new "468 rule".
The new "468 rule"
The Amendment Ordinance revises the working hours threshold of the "continuous contract" requirement, where:
- the weekly working hours threshold has been lowered from 18 hours to 17 hours; and
- more importantly, the old requirement of using the number of working hours in each week as a counting unit during a specified four-week period has been abolished, and will be replaced with the new requirement where a week with less than 17 working hours will still be regarded as a continuous employment period if the total number of the working hours of that week and those of the three weeks immediately preceding it reaches 68 hours.
Under the old "418 rule", the working hours threshold for a "continuous contract" is 18 hours per week. The amendments will lower the working hours threshold of a "continuous contract" and provide flexibility in calculating the number of working hours. This reduces the circumstances that may disrupt the continuity of an employee's employment as a result of the number of working hours of a particular week in a specified four-week period falling below the threshold.
In April 2025 edition of our employment newsletter, "Hong Kong Government to change the "418 rule" under the Employment Ordinance: 468 is the new 418", we discussed in detail on how the new "468 rule" will impact employers and employees. Please click here for our article.
Takeaway
The old "418 rule" has been part of the Employment Ordinance for decades. Indeed, it has been one of foundation stones of Hong Kong's contemporary employment law. Over the years, the "418 rule" has been criticised for being too rigid and excluding workers with fluctuating working hours (e.g. retail, catering, and food and beverage industries). Indeed, some employers have been operating their businesses for decades by arranging their employees to work in fluctuating working hours so as to avoid triggering the "418 rule". This is not uncommon. It is part of their business model with a view to cut costs and increase competitiveness.
The amendments will take effect from 18 January 2026. The new "468 rule" will become the requirement, replacing the existing "418 rule". This change is inevitable and the question for businesses is how they respond to the change. It is crucial for employers to closely monitor its implications for payroll arrangements and operational practices. The new "468 rule" will likely change existing employees' rights, benefits and protections, in particular, for businesses that have been operating on the premises that they will not trigger the existing "418 rule". These employers should review their payroll systems and staffing arrangements so as to ensure compliance and eliminate or reduce the risk of unintentional violations of the Employment Ordinance (from 18 January 2026). As always, if in doubt, it is advisable to seek legal advice.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
