Introduction  

Hong Kong’s employment framework has entered a significant transition with the introduction of the 468 Rule, replacing the long-standing 418 Rule for determining continuous employment. Effective 18 January 2026, the new continuous contract requirement provides greater flexibility for part-time and casual workers, ensuring that employees with irregular work schedules can qualify for statutory benefits while reducing uncertainty for employers.  

The 418 Rule (Previous Framework) 

Before the introduction of the 468 Rule, Hong Kong applied the 418 Rule to determine whether an employee was under a continuous contract.

Under this framework, an employee was required to work at least 18 hours per week for 4 consecutive weeks.

Employees who met this requirement were regarded as being under a continuous contract and were therefore eligible for statutory benefits.

However, this framework was often viewed as rigid, as the eligibility depended strictly on meeting the weekly threshold in every single week, regardless of the employee’s total working hours over the period.  

As a result, employees who worked substantial total hours over a 4-week period could still be excluded from continuous contract status if they fell short of the 18-hour requirement in any single week. 

Example: Application of the 418 rule

Outcome: Not qualified under the 418 Rule 

Despite working a total of 79 hours over 4 weeks, the employee failed to meet the 18-hour weekly threshold in one of the weeks. As a result, they would not be regarded as being under a continuous contract and would not be entitled to statutory benefits. 

The New 468 Rule Explained

The 468 Rule introduces a more flexible approach to determining continuous contracts. An employee is considered under a continuous contract if the following conditions are met:

1. Continuous Employment Duration
   • The employee has been employed continuously by the same employer for 4 weeks or more.

2.  Working Hours Requirement 

   The employee must meet one of the following conditions:

   • Worked at least 17 hours in each week; OR
   • Worked 68 hours or more over a 4-week period comprising that week and the 3 weeks immediately preceding it (the “468 Rule”).

Illustrative Scenarios: 

Scenario A: Meeting the weekly 17-hour requirement

Outcome: Employee qualifies, as the 17-hour weekly threshold is met consistently. 

Scenario B: Meeting the 468 Rule (rolling 4-week period)

Outcome: Employee qualifies under the 468 Rule as the total hours worked over the 4-week period meet the 68-hour requirement. 

Scenario C: Failing the 468 Rule (rolling 4-week period)

Outcome: Employee does not qualify under the 468 Rule as the total hours worked over the 4-week period does not meet the 68-hour requirement. 

Key Technical Considerations

• Each week is always reviewed with the previous 3 weeks.
• The 4-week total is rolling, not tied to calendar months.
• The amendments are not retrospective. Weeks prior to 18 January 2026 remain subject to the 418 Rule.
• For new joiners, the first 3 weeks must meet 17 hours per week before the 468 Rule can apply. 

418 vs 468 Rule: Key Differences

Statutory Benefits Under Continuous Contract 

While the 468 Rule changes how continuous contracts are determined, the statutory benefits themselves remain unchanged. Employees who meet the 468 Rule requirement may become eligible for statutory entitlements, including:  

• Paid annual leave
• Statutory holiday pay
• Sickness allowance
• Maternity and paternity leave
• Severance and long service pay 

HR teams should monitor hours worked carefully to ensure part-time and casual workers are accurately captured in compliance systems, avoiding potential disputes or compliance risks.   

Practical Implications for Employers  

The introduction of the 468 Rule changes how continuous employment is assessed meaning that employers may need to review their workforce arrangements to ensure compliance with the updated framework. HR departments must be aware that failing to comply with the new requirements may lead to employment disputes, regulatory penalties or reputational risks.  

Industries that rely heavily on part-time and casual workers will feel the most significant impact. Retail, hospitality and logistics are examples where workers often work uneven hours and under the old 418 Rule, many of these workers were excluded from benefits. Now, with the new 468 Rule, more of these workers may now fall within continuous contract coverage which means employers in these sectors must prepare for higher benefit costs and stronger compliance requirements. 

Key Compliance Actions for Employers 

With the 468 Rule in place, employers should take the following steps to ensure compliance:

1. Update contracts and HR policies

Ensure employment contracts and internal policies reflect the 68-hour requirement across four weeks and recognise eligible part-time and casual workers.

2. Review attendance tracking systems

Confirm that systems capture cumulative hours over rolling 4-week periods, not just weekly totals.

3. Train HR teams on the new requirements

Ensure HR personnel understand how the 468 Rule operates and how to apply it in practice.

4. Audit payroll and benefits calculations

Verify that statutory entitlements are calculated accurately under the revised framework. 

How RSM Hong Kong Advisory can help

With the 468 Rule in place, employers may need to reassess how working hours are tracked and how statutory benefits are calculated for part-time and casual workers. Ensuring that HR policies, employment contracts and payroll systems reflect the updated continuous contract requirement is essential to avoid compliance risks.  

RSM Hong Kong Advisory’s Payroll and HR Advisory Services team provides scalable payroll solutions and expert compliance guidance to reduce HR workload and ensure your payroll processes remain accurate and fully compliant with Hong Kong employment regulations.

Contact RSM Hong Kong Advisory to ensure your payroll processes remain accurate and fully compliant.