The devil lies in the details: The 417 / 468 Rule

The concept of a “continuous contract” is central to determining whether an employee is entitled to statutory benefits under the Employment Ordinance (EO).

The EO makes no distinction between full‑time, part‑time, casual, or irregular‑hour employees. Once an employee meets the continuous contract requirement, they gain full statutory entitlements such as paid annual leave, sickness allowance, statutory holiday pay, maternity/paternity leave, severance, and long service payment.

The new requirement will be applicable from 18 January 2026. The new rule has two parts:

17 Hours per Week (417)

An employee qualifies as continuous if they work at least 17 hours per week for 4 consecutive weeks.

This small change from 18 to 17 hours closes the previous loophole where employers could schedule 17.5 hours weekly to avoid benefits.

68 Hours in 4 Weeks (468)

Even if an employee works under 17 hours in a single week, they still qualify if their total hours across that week plus the previous 3 weeks reach 68 hours or more.

In short, averaging 17 hours per week over 4 weeks also counts.

This prevents a single low-hour week from breaking continuity.

Week 1 – 4: hits both 417 and 468

Week 5 hits 468, then week 6 & 7 hit 417, week 6 & 7 counts as continuous contract because in week 5 it is a continuous contract

Impact on Employers: Compliance, Costs, Operations

This rule has major implications for employers who rely on part-time, shift-based, or casual staff—especially retail, F&B, logistics, and hospitality.

Key compliance points:

Reassessing Employee Classifications

Many staff previously treated as “freelancers” or “non‑permanent” may now qualify as continuous employees with full entitlements.

Adjusting HR, Payroll, and Rostering Systems

Businesses must track hours using rolling 4‑week windows. Static weekly tracking is no longer enough.

Reviewing Contract Templates and HR Documents

Templates must reflect the updated definition of continuous employment and the benefits tied to it.

Cost Implications

Expect increases in benefit-related expenses, particularly for high‑turnover part‑time roles (leave, holidays, severance, etc.)

Legal Risks

Incorrect application can lead to penalties, back pay, and disputes.

Interaction with Other 2025–2026 Reforms

The 468 rule aligns with other major changes:

• Abolition of MPF offsetting

• Increase in statutory holidays

Compliance must now be managed holistically.

How to Prepare: HR Teams and SMEs Checklist

Conduct an employee status assessment

Identify part-time, casual, and freelance workers nearing the 68‑hour threshold.

Update time-tracking systems

Ensure the system supports rolling 4‑week hour calculations.

Revise contracts and HR policies

Align all documentation with the new continuous employment standard.

Train managers and HR teams

Teach them how to apply the 468 rule and identify eligible employees.

Communicate with affected staff

Proactively inform employees who now qualify to avoid confusion or disputes.

Align with broader compliance strategy

Integrate the 468 update with other labour-law reforms to reduce disruption.