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In Hong Kong, whether or not to purchase insurance for hourly workers is a common but important question, especially for families or individuals who hire hourly workers (i.e. part-time domestic helpers or temporary workers) to handle daily household chores. This issue not only involves legal liability, but also concerns the protection of the rights and interests of both employers and employees. This article will explore in depth the Hong Kong law requirements for hourly workers insurance, the relevant legal framework, practical considerations, and the risks and consequences of not purchasing insurance.
Hong Kong Employment Ordinance
Regardless of whether the employee is full-time or part-time, regardless of the length of working hours or the duration of the contract, as long as there is an employment relationship, the employer is responsible for insurance.
Purpose of insurance: Employees' compensation insurance is designed to protect employees from accidental injury, illness (including occupational diseases) or death during work, and the employer will be able to pay corresponding compensation, including medical expenses, sick leave pay and other statutory compensation.
Minimum coverage：The regulations stipulate the minimum insurance coverage for each accident. For example, the insurance coverage for each accident involving an employee must not be less than HK$100 million (the specific amount may be adjusted over time and please refer to the latest laws).
The key question is: Are hourly workers considered “employees” under the Employees’ Compensation Ordinance? The answer depends on the specific employment relationship.
Employment relationship determination criteria
Legal Definition: According to the Employment Ordinance, if a worker meets the requirements of a "continuous contract" (i.e. working more than 18 hours per week for more than 4 weeks), he or she will be regarded as an "employee" and enjoy statutory benefits.
If hourly workers do not meet the required working hours, they may be classified as "non-continuous employees" or "self-employed persons", which will affect the definition of insurance liability.
Nature of work: Whether the work is part of the employer’s business. For example, an hourly worker cleaning a private household's home is generally considered a private need of the employer rather than a commercial business.
Control test: Whether the employer directs the time, place and manner of work. For example, if an employer assigns an hourly worker to clean a specific room from 9:00 a.m. to 11:00 a.m. every day, this demonstrates strong control.
Economic Dependence: Whether the worker relies on income from a single employer as his or her main source of income.
Tools and Equipment: Do workers bring their own tools? Or do they use tools provided by the employer (e.g. vacuum cleaners, cleaning agents).
Common controversial pointsHourly workers often work flexible hours and may be misclassified as "self-employed", causing employers to ignore insurance responsibilities.
Case 1: Directly hired hourly workers
If you hire an hourly worker directly and give clear instructions about when, what, and how they are to work, the law will generally consider this to be an employment relationship. In this case, the hourly worker is regarded as your "employee" and you as the employer must purchase employees' compensation insurance for him/her in accordance with the Employees' Compensation Ordinance. This obligation applies even if the worker only works a few hours.
Situation 2: Hiring through an intermediary platform
Many Hong Kong families hire part-time workers through intermediary platforms. In this case, the identity of the hourly worker may vary:
Platform staff: If the hourly worker is a formal employee of the platform, who is paid and has his/her work managed by the platform, then an employment relationship exists between the platform and the worker. As a customer, you only need to pay the service fee, and the platform is responsible for purchasing insurance for its employees.
Self-employed persons: If the hourly worker is an independent contractor of the platform (i.e. a self-employed person), there is no employment relationship and you do not need to purchase insurance for him or her. However, this requires clear evidence (such as a contractual clause) that the worker is self-employed.
In practice, intermediary platforms usually explain the identity and insurance responsibilities of hourly workers in their terms of service. It is recommended that you confirm with the platform before hiring and keep relevant documents to avoid legal disputes.
Situation 3: Self-employed
If an hourly worker clearly provides services as a self-employed person (e.g., issues invoices, assumes their own tax responsibilities, uses their own tools), they are not legally considered your employee and you do not need to purchase workers' compensation insurance for them. However, self-employment status must be supported by clear evidence, otherwise the court may re-examine the relationship between the two parties.
Potential risks of not purchasing insuranceand consequences
Legal liability : The Labour Department has the power to prosecute employers who fail to provide insurance. Based on past cases, the fine for a first offense may be relatively light, but if a work-related injury is involved, the court may increase the penalty.
It is illegal to fail to insure your employees. According to Section 40 of the Employees' Compensation Ordinance, if an employer fails to take out insurance, he may be fined up to HK$100,000 and imprisoned for 2 years. In addition, if an employee is injured during work, the employer will be responsible for all compensation costs, which may amount to millions of Hong Kong dollars.
Financial risks : Workers’ compensation claims can be extremely high. Examples include falling while cleaning high windows, electric shock when using electrical appliances, or health problems caused by chemical cleaning agents. Without insurance, employers face the risk of huge compensation claims. Compensation could include lifelong medical expenses and loss of income, amounting to millions of Hong Kong dollars.
Reputational loss: Being exposed by the media or condemned by labor groups can affect your corporate image, especially if it involves litigation, which may affect your personal or family reputation.
Moral Responsibility: Providing protection for workers is not only a legal requirement, but also a basic respect for workers, especially hourly workers who are mostly economically disadvantaged groups.
Insurance cost estimation and comparison
Employees' Compensation Insurance : Basic premium: approximately HK$500-2,000 per year (depending on the industry risk, lower for office cleaning and higher for height work).
Public Liability Insurance : Average annual cost: HK$1,000-5,000 (based on a sum insured of HK$10 million).
Factors affecting premiums : Type of work risk, number of employees, and past claims record.
Practical steps to buy insurance
If you decide that you need to purchase insurance for your hourly workers, here are the practical steps:
Confirmation of employment relationship:
First, clarify your relationship with your hourly worker and, if necessary, sign a simple employment agreement that spells out work hours, compensation, and responsibilities.Clarifying the employment relationship, confirm whether the hourly worker is an "employee" or "self-employed".
Compare Insurance Company Plans:
Assess risk based on the nature of the work (e.g. cleaning, maintenance).
Employees' Compensation Insurance (Labor Insurance): Basic insurance for work-related injuries, many insurance companies on the market provide such products. Premiums are usually calculated based on the worker's salary, nature of work and hours worked, and annual premiums can be as low as a few hundred Hong Kong dollars.
Comprehensive domestic helper insurance: Some insurance companies offer comprehensive insurance designed specifically for hourly workers, which may cover third-party liability (such as workers damaging neighbor's property) in addition to work-related injuries.
Provide information:
When purchasing insurance, workers’ basic information (name, ID number), job content and expected working hours must be provided. For anonymous insurance (i.e. where the worker’s name is not specified), the total hours worked or number of workers must be reported.
Pay your premium:
Premiums vary by company and coverage. For example, the domestic helper insurance launched by Toby platform in cooperation with Ping An of China starts from as low as HK$28 (excluding insurance levy), providing HK$100 million in labor insurance and HK$1 million in third-party liability protection.
Save Policy:
After purchasing insurance, keep a copy of the policy and ensure that the insurance is valid while the worker is employed.
Common problems and case analysis
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If an hourly worker only works one hour, does he need to buy insurance?
Yes, insurance is required by law as long as there is an employment relationship, no matter how few hours are worked.
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Who is responsible for the insurance of workers hired through the platform?
Depends on the platform terms. If the worker is an employee of the platform, the insurance is covered by the platform; if he is self-employed, you do not need to purchase insurance.
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If a self-employed worker is injured, do I need compensation?
If you can prove that the worker is self-employed, you are not responsible. But if the worker claims to be your employee, the court will examine the relationship.
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Part-time cleaner slips and gets injured
The court ruled that the employee’s employer had failed to provide insurance and was required to pay HK$200,000 in medical expenses and wage loss.
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Self-employed repairman damages customer furniture
The employer purchased public liability insurance, and the insurance company borne the repair costs of HK$80,000.
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Does the insurance cover transportation accidents when travelling to and from work?
Labor insurance usually covers "working period", and additional group accident insurance is required for commuting to and from get off work.
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Is insurance expensive?
It is generally not high, with annual fees ranging from several hundred to over a thousand Hong Kong dollars, depending on the risk and hours of work.
Summary and suggestions
- Compulsory insurance: All employers must purchase Employees' Compensation Insurance for hourly workers, regardless of the number of hours worked.
- Voluntary Insurance: Purchase public liability insurance or medical insurance based on the risks of your job for comprehensive protection.
- Risk Management: Review employment contracts regularly and consult legal and insurance experts to avoid misjudgment of employee status.
appendix
Employment Protection Ordinance
(I) Employment Contract and Terms of Employment
- An employment contract can be concluded in writing or orally. Therefore, even if an employee does not sign a written contract with his employer, he is still protected by the Employment Ordinance. If an employer and an employee enter into a written employment contract, the employer must give a copy of the contract to the employee for reference and preservation.
- Any term of an employment contract which has the effect of terminating or reducing any rights or protection conferred on the employee by the Employment Ordinance shall be void.
(II) Protection under the Employment Ordinance
- All employees, regardless of their working hours, enjoy certain basic protections under the ordinance, such as payment of wages, restrictions on wage deductions and the granting of statutory holidays.
- If an employee is employed under a "continuous contract", he or she will enjoy more benefits, such as rest days, paid annual leave, sickness allowance, severance pay and long service payment.
- If an employee works for the same employer continuously for four weeks or more and works at least 18 hours in each period, his employment contract is a continuous contract (regardless of whether the employee is a "permanent employee", "trial worker", "temporary worker", "casual worker", "hourly worker" or "summer worker", etc.).
(III) Non-employment contracts
There are some industries or organizations that often recruit "practitioners" rather than employees. The contractual relationship between the two parties is a "principal-agent" relationship rather than an employment relationship. The "principal-agent" relationship is common in the insurance and financial industries, or in positions where commissions are calculated based on the number of products sold. "Practitioners" who provide services in a "principal-agent" relationship cannot enjoy the welfare protection under the Employment Ordinance. Therefore, job seekers should clearly inquire about the nature of the contract.
Hong Kong Labour Department Information
Foreign domestic helper hotline: 2157 9537
URL: https://www.labour.gov.hk
Office Hours:
| (1) | Monday to Friday (9:00am to 1:00pm and 2:00pm to 6:15pm) |
| (2) | Monday to Friday (9:00am to 6:15pm) |
| (3) | Monday to Sunday (24 hours, answered by "1823") |
Legally mandatory insurance requirements
Employees' Compensation Ordinance (Cap. 282)
- Scope of application: All employees (including part-time and temporary workers), regardless of working hours.
- Mandatory requirements：Employers must purchase "employee compensation insurance" (commonly known as "labor insurance") to cover accidental injuries or occupational diseases during work.
- Penalties: Failure to purchase insurance may result in a maximum fine of HK$100,000 and imprisonment for 2 years.
- Exceptions:If hourly workers are identified as "self-employed persons", they are not covered by compulsory insurance.
- Household employer: (If you hire a domestic helper) you must also comply with the regulations.
- Protection Content:Medical expenses, wage replacement, permanent disability or death compensation.
Types and coverage of voluntary insurance
Even if not required by law, employers may consider the following insurance to reduce risk:
| Insurance Type | Coverage | Applicable scenarios |
|---|---|---|
| Public Liability Insurance | Covers third party injuries or property damage in the workplace (e.g. part-time workers breaking valuables). | Hourly work requires contact with client property or public spaces. |
| Group Accident Insurance | Provides coverage for accidents that occur during non-working hours (such as injuries sustained on the way to or from get off work). | High-risk industries or long-term hourly workers. |
| Medical Insurance | Pay for outpatient and hospitalization expenses and improve employee benefits. | Attract high-quality talent or long-term employment relationships. |
| Self-employed insurance | If the hourly worker is considered self-employed, this type of insurance can transfer liability arising from their work (such as losses caused by negligence). | Employers want clarity on legal grey areas. |
Domestic Helper Insurance Comparison: Foreign Domestic Helper Insurance VS Domestic Helper Insurance
| Foreign domestic helper insurance VS domestic helper insurance | Foreign domestic helper insurance | Domestic helper insurance |
|---|---|---|
| Applicable domestic helper categories | Foreign domestic workers | Local full-time and part-time domestic helpers |
| Coverage | In addition to statutory employer obligations, the following protections are also provided: Personal accident protection Hospitalization and surgical expenses compensation Repatriation expenses Domestic helper's property protection Domestic helper's integrity protection | Protect domestic helpers from the statutory employer obligations under the Employees’ Compensation Ordinance (Chapter 282 of the Laws of Hong Kong) due to work-related injuries |
| Is it necessary to buy? | yes | yes |
| Premium | Higher | Lower |
