Labour Legislation

EMPLOYEES' COMPENSATION ORDINANCE, CHAPTER 282

The Employees' Compensation Ordinance establishes a no-fault, non-contributory employee compensation system for work injuries. Major provisions of the Ordinance are : 

Application

• An employer is liable to pay compensation in respect of injuries sustained by his employees as a result of an accident arising out of and in the course of employment; or in respect of occupational diseases specified in the Ordinance suffered by the employees. 
• The Ordinance in general applies to employees who are employed under a contract of service or apprenticeship. Employees who are injured while working outside Hong Kong are also covered if they are employed in Hong Kong by local employers. 

• A two-tier system - Employees' Compensation (Ordinary Assessment) Board and Employees' Compensation (Special Assessment) Board - is provided for to assess the necessary period of absence from duty and the percentage of loss of earning capacity permanently caused to the employee as a result of the work injury. 

Compensation for death 

Age of deceased employee	Amount of compensation
under 40	84 months' earnings (1) or minimum amount of compensation (2),whichever is higher
40 to under 56	60 months' earnings (1) or minimum amount of compensation (2),whichever is higher
56 or above	36 months' earnings (1) or minimum amount of compensation (2),whichever is higher

Funeral and medical attendance expenses in fatal cases

• Any person who has paid funeral and/or medical attendance expenses on an employee who died in a work-related accident is entitled to claim reimbursement from the employer of the deceased employee of such expenses not exceeding $35,000.(This is only applicable to accidents happened on or after 1 August 2000.)

Compensation in cases of permanent total incapacity

Compensation payable for permanent total incapacity resulting from a work injury is calculated with reference to the age and monthly earnings of the injured employee:

Age of injured employee	Amount of compensation
under 40	96 months' earnings (1) or minimum amount of compensation (3),whichever is higher
40 to under 56	72 months' earnings (1) or minimum amount of compensation (3),whichever is higher
56 or above	48 months' earnings (1) or minimum amount of compensation (3),whichever is higher

Where permanent partial incapacity results from the injury, the amount of compensation is a percentage of the compensation payable for permanent total incapacity as is proportionate to the loss of earning capacity caused by the injury.

Remarks:

1. Monthly earnings are subject to a maximum for the purpose of calculating compensation for fatal cases and permanent total incapacity:
   • Work injuries caused by accidents happening or prescribed occupational diseases contracted on or after 1 August 2010: $21,500
   • Work injuries caused by accidents happening or prescribed occupational diseases contracted before 1 August 2010: $21,000
     
2. Minimum amount of compensation for death:
   • Work injuries caused by accidents happening or prescribed occupational diseases contracted on or after 1 August 2010: $310,000
   • Work injuries caused by accidents happening or prescribed occupational diseases contracted before 1 August 2010: $303,000
     
3. Minimum amount of compensation payable for permanent total incapacity:
   • Work injuries caused by accidents happening or prescribed occupational diseases contracted on or after 1 August 2010: $352,000
   • ork injuries caused by accidents happening or prescribed occupational diseases contracted before 1 August 2010: $344,000

Periodical Payment

• An employee is entitled to receive periodical payments during the period of temporary incapacity (sick leave) up to 24 months. The payment should be calculated as follows: 

 

(

Monthly earnings at the time of the accident

less

Monthly earnings after the accident

)

X 4/5


 
• If the employee's temporary incapacity lasts more than 24 months, he may apply to the Court for an extension of his entitlement for the payment. The extended period shall not be longer than 12 months. 

• The daily maximum of medical expenses payable by the employer are as follows -
  

  i.	the medical expenses for each day of stay in the hospital where an employee is given medical treatment as an in-patient:	HK$200
  ii.	the medical expenses for each day on which an employee is given medical treatment other than as an in-patient in a hospital:	HK$200
  iii.	the medical expenses for each day on which an employee is given medical treatment both as an in-patient in a hospital and other than as an in-patient in a hospital:	HK$280

• Depending on the nature of the case, a claim for employees' compensation can be settled in the following ways: 
• Direct Payment 
• Direct Settlement 
• Settlement by Certificate 
• Settlement by Court 

• An employer must be in possssession of a valid insurance policy to cover his liabilities both under the Employees' Compensation Ordinance and at common law for the work injuries for his employees.

For any information concerning the list of insurers underwriting employees' compensation insurance, please click here to access to the relevant website of the Hong Kong Federation of Insurers. 

If an employer experiences difficulties in acquiring employees' compensation insurance cover, he may apply to join the Employees’ Compensation Insurance Residual Scheme. For Scheme details and the eligibility criteria, please visit the website of the Employees’ Compensation Insurance Residual Scheme Bureau.

Click here for A Concise Guide to the Employees' Compensation Ordinance (with frequently asked questions on common employees' compensation issues) (PDF)