Severance Pay

My domestic helper has been with us for 14 years, fulfilled six (6) 2 year contracts. Are they entitled for severance pay for the previous contracts honored, and not the current one (they are breaking this contract)? Ive heard a few conflicting answers, I've also contacted the HK labor department, in which they sent a website link and the read is also confusing.

Thank You.

ED's NOTE: you can find information on this on the HK Labour Department Website:

Q5: | Under what circumstances should an employer pay severance payment or long service payment to his/her FDH if he/she terminates the FDH's contract?
A5: | An employer should pay severance payment to his/her FDH if the FDH has been employed continuously for not less than 24 months and is dismissed (or his/her contract is not renewed) by reason of redundancy. An employer should pay long service payment to his/her FDH if the FDH has been employed continuously for not less than 5 years and is dismissed (or his/her contract is not renewed) by reason other than serious misconduct of the FDH or redundancy.However, an employer is not required to pay both long service payment and severance payment to the FDH.

Q6: | How to calculate the amount of severance payment and long service payment payable to the FDH?
A6: | Severance payment and long service payment are calculated as follows :(monthly wages x 2/3) x reckonable years of services** service of an incomplete year should be calculated on a pro rata basis.

4 replies

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daduda · 18 December

Just talked to LD officer on the phone and he said that if an employee completes 2 year contract and then his old employer does not sign a new contract with this helper or any other helper it is viewed by LD as a case when the employer must pay severance payment to the old helper. Sounds strange to me since it looks like the helper is the one who should report to LD of the old employer hiring no other new helper to get paid severance payment. Is there anyone who did not sign a new contract with their helper, did not hire another helper instead and did not pay any severance payment to the old helper?

Susie1 · 18 December

If your helper is not going to have her contract renewed by you when it expires in March you should not have to pay any severance payment, you will just need to inform immigration and the helper, that the contract will not be renewed, wise to do this one month before contract expires. What you are liable for at the end of a two year contract is the door to door fare from HK to the helpers home town, that is a one way air ticket, plus any internal flights in her home country, and any transport fare ie (bus) from you HK home to the airport, and from her home town airport to her town, and 100 hkd per day while she is travelling. If she has her wages paid up to the day she leaves then that is all you have to pay.

Hat Trick · 18 December

Actually the requirement to pay any severance payment does not occur until an employee has served 24 months under continuous contract. You would only need to pay if your helper had completed two two year contracts and you had signed the third contract. As far as I understand if you do not renew after completion of second contract you do not need to pay it - it only becomes a requirement in the case of redundancy/termination after the commencement of the third contract. For this reason many people do not renew more than twice with the same helper. If you go to the Labour Dept website you can read the full details under the Employees Ordinance Chapter 57 which has a section summarising details of severance and long service payment requirements.

punter · 18 December

The redundancy labour law protects all employees, including domestic helper. If you for example work for a company and the position was "deleted", i.e. not needed anymore, your employer needs to pay you a severance pay. That's exactly the same with domestic helpers. If the contract is finished and you don't re-hire the FDH or don't hire a new helper, the FDH was made redundant and you as the employer needs to pay her severance pay. It sound strange but it's the law.