What the law says: it's about the employment relationship, not the hours
Under section 40(1) of the Employees' Compensation Ordinance (Cap. 282), employers must take out Employees' Compensation Insurance for their employees, covering liability under both the Ordinance and common law. The Ordinance sets no minimum working hours or minimum period of employment — as long as an employment relationship exists between you, whether you hire someone for a full month or just one day, cover is required. For the full breakdown of what's covered and how premiums are calculated, see our complete Employees' Compensation Insurance guide.
Which roles actually need to be covered?
| Role | Employees' Compensation Insurance required? |
|---|---|
| Full-time employee | Yes |
| Part-time employee | Yes — regardless of weekly hours |
| Casual / temporary worker | Yes — even for a single day |
| Employee on probation | Yes — probation is still an employment relationship |
| Remote / WFH employee | Yes — work location doesn't affect the duty to insure |
| Self-employed person with no staff | No — see below |
Self-employed with no staff: do you need to insure yourself?
No. The Employees' Compensation Ordinance governs the employer's duty toward its employees — if you run a one-person business with no staff, you are not legally required to buy Employees' Compensation Insurance for yourself. The Labour Department suggests that self-employed individuals may voluntarily take out personal accident insurance to cover medical costs or lost income if injured, but this is optional, not a statutory requirement.
The "false self-employment" trap
To save on premiums and statutory obligations, some owners dress up what is substantively an employment relationship as "outsourcing" or "self-employment." What a court looks at isn't the wording of the contract — it's the actual working arrangement: whether you supervise the work, whose tools are used, and who sets the working hours. If the arrangement is found to be false self-employment, the employer becomes immediately liable for all the statutory obligations that were skipped, including the criminal liability for not having insured them.
What's the real cost of not buying it?
Failing to buy Employees' Compensation Insurance is a criminal offence under section 40(1) of the Ordinance, carrying a maximum fine of HK$100,000 and two years' imprisonment. There's an even costlier consequence: if a part-timer or casual worker is actually injured on the job, the employer bears the full statutory compensation under the Ordinance and civil liability under common law directly — an amount that can far exceed years of premiums.
The two mistakes owners make most often
- "Hourly-paid or casual staff without a signed contract don't count as employees" — Wrong. Whether there's a written contract has no bearing on whether an employment relationship exists; a verbal agreement or shift-based pay can still constitute employment.
- "I've only hired one part-timer, so it's not worth insuring specifically" — Wrong. The Ordinance sets no minimum headcount — even a single part-timer requires cover.
Not sure which roles in your business are currently uninsured? Use our coverage check for a two-minute assessment, or reach out and we'll go through it with you for free.