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A Guide to Maternity Leave and its Costs to Employers

A Guide to Maternity Leave and its Costs to Employers

As an employer who set up a new business in Hong Kong, you might need to update your company’s policies and procedures concerning leave entitlements for your staff on maternity leave. This is because the Legislative Council of Hong Kong has passed the Employment Amendment Ordinance, which gives 14 weeks of maternity leave to working mothers in Hong Kong. This change took effect on 11th December 2020.

This article will aim to explain Hong Kong’s updated maternity leave laws concerning maternity leave entitlement, maternity pay as well as other types of maternity-related leaves. Let us go through with you this updated law and how it will impact you as an employer.

Who Is Eligible for Maternity Leave in Hong Kong, and for How Long?

Women who are employed under a continuous contract for no less than 40 weeks (working a minimum of 18 hours per week) immediately before her maternity leave are eligible for 14 weeks of paid maternity leave. This is 4 weeks more than before the Bill was amended. Previously, working mothers were granted 10 weeks of maternity leave.

If a mother’s period of continuous employment is short of 40 weeks, she is only entitled to 10 weeks of unpaid maternity leave in Hong Kong.

What Is the Cost of Maternity Leave to an Employer?

Hong Kong’s current rate of maternity leave pay will remain unchanged which is at 80% of the employee's average daily wages for 14 weeks. This is capped at HKD 80,000 per employee.

As a company owner and an employer, you can apply to the government for reimbursement of the additional four weeks of leave.

Natasha is the owner of Hope Pte. Ltd. Her employee, Adela, who has worked for her for 2 years and has given her notice, is going on 14 weeks of maternity leave starting on 12th December 2020. Adela earns HKD 10,000 per month.

For Adela’s maternity leave, Natasha needs to pay Adela at least 80% of her salary:

80% x 14 weeks (3.22191 months) maternity leave x HKD $5,000 = HKD $12,887.64

Natasha could apply for reimbursement to the Hong Kong government for 4 out of the 14 weeks maternity pay: HKD 3,682.19 out of the total of HKD 12,887.64 that she needs to pay Adela.

Employers are legally prohibited from firing a pregnant employee until the end of her maternity leave. If the proof of pregnancy can be provided after the termination notice given to the employee, the employer needs to revoke the termination.

Work arrangements should also be tailored accordingly, meaning no heavy, hazardous or harmful work for a pregnant employee.

When Does Maternity Leave Start?

Pregnant women in Hong Kong begin maternity leave 2 to 4 weeks before their expected due date. If a woman does not agree on a date with her employer, by default, the 14 weeks leave starts 4 weeks before the expected due date, giving her 10 remaining weeks of maternity leave after the baby is born.

An employee can negotiate with her employer whether to have 2 weeks prior giving birth, and then 12 weeks after, or 4 prior then 10 after, or even 1 week prior birth, then 13 weeks after, so long as it is agreed between you and your employer.

If your employee’s baby is born early, their maternity leave begins immediately.

When Should Your Employee Notify You of Her Maternity Leave?

There is no minimum period within which an employee must give notice of her pregnancy. However, it should be within the company’s policies to give the notice sooner rather than later so that the employer is protected from being wrongfully dismissed.

If your employee is absent from work for doctor’s appointments related to her pregnancy, such as for antenatal check-up, post-confinement medical treatment, or miscarriage, those days will be counted as sick days or partial sick days, and you would need to pay her sick leave pay.

A certificate of attendance issued by a medical practitioner is now accepted as documentary proof as an alternative to a medical certificate for entitling an eligible employee to sickness allowance for any day on which the employee has attended a medical examination concerning her pregnancy.

Similar to maternity leave pay, sickness pay is calculated at 80% of her average daily wage leading up to the sickness day. She will be entitled to sickness pay for days off taken for pregnancy check-ups, post confinement medical treatment, or miscarriage provided that your employee produces a medical certificate and she has accumulated a sufficient number of paid sick days. The medical certificate should specify the number of days and nature of the sickness or injury that makes her unfit for work.

Female employees suffering a miscarriage at the 24th week of pregnancy or later will now be entitled to statutory maternity leave if other conditions are satisfied. Previously it was before 28 weeks of pregnancy.

In case of birth or pregnancy-related illness and disability, they may be entitled to a maximum of 4 weeks of additional maternity leave. This is in addition to their sick leave entitlement.

If a baby is born later than the due date, the period between the expected due date and the actual birth date will be provided as leave in addition for your employee.

However, any extended maternity leave due to late delivery or illness or disability will be unpaid. If your employee is unable to work due to an illness or disability, she may choose to take sick leave instead.

Paternity Leave for Fathers: What an Employer Needs To Know

Fathers in Hong Kong are granted 5 days of paternity leave. Male employees will be able to take their statutory paternity leave within 14 weeks (instead of 10 weeks) if the child is born on or after 11 December 2020.

Fathers will be paid 80 percent of their salary during their leave.

Jason took paternity leave on Tuesday, 15th of December 2020, the day his child was born, and 2 days after, taking care of his wife and newborn (3 out 5 paternity leave days used up). On Friday, he reports back to work. He would have until the 23rd March 2021 (14 weeks after) to take the remaining 2 days of paternity leave.

Advantages of Keeping Up with Maternity and Paternity Leave Policies

The advantage of maternity leave is that it safeguards the economic security and health of mothers and newborns. In the weeks following birth, women need time to recover from labor, adjust to a new family structure, and nurse their child.

Longer maternity leaves result in lower rates of premature births, pregnancy, and postpartum depression. Longer maternity leave is also linked to facilitating breastfeeding practices. Thus, employers would benefit more from this added maternity leave in the long run, as their employees would have a bit of longer time to heal as compared to before.

As a company owner, there are many things to take care of while you grow your business besides keeping up with maternity and paternity policies. Let our experienced accountants help you with bookkeeping and accounting tasks. You don’t have to do everything on your own.

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