Scope of Coverage
The Employees’ Compensation Ordinance (ECO) (Cap. 282) is Hong Kong’s law that provides a framework for compensating employees who suffer job-related injuries or occupational diseases. It establishes a no-fault, non-contributory compensation system , meaning an injured employee is entitled to compensation regardless of fault (no need to prove employer negligence) and the compensation is funded by employers (typically via insurance, with no contributions from employees). The ECO ensures that workers are protected from the financial hardships that can result from workplace accidents, while also clearly defining employers’ liabilities.
The ECO covers all employees engaged under contracts of service or apprenticeship in Hong Kong, including full-time and part-time workers. It applies to injuries sustained “out of and in the course of employment,” which generally means any accident that occurs while the employee is performing work duties (including off-site work assignments) . Specified occupational diseases (listed in the Ordinance) are also covered when contracted due to the nature of the employment . Notably, if Hong Kong employees are injured while working outside Hong Kong (on overseas assignment for a local employer), they are still covered by ECO . There are very few exclusions – for example, truly independent contractors (not employees) and casual domestic workers might fall outside, but virtually every employee-employer relationship is encompassed.
Under this no-fault system, an employee does not have to prove the employer was negligent or at fault to claim compensation. Even if the accident was due to employee’s own error or pure mishap, they are entitled to statutory compensation. (The only general exception is if the injury is intentionally self-inflicted or due to serious and wilful misconduct, and even then, if death or serious permanent injury results, compensation still often must be paid.)
Compensation Benefits under ECO
The Ordinance sets out standard formulas for various types of compensation:
• Medical Expenses: Employers must cover an injured employee’s necessary medical treatment expenses, up to a statutory limit per case. These limits are updated periodically (currently, the cap is in the tens of thousands HKD for outpatient treatment and more for serious procedures). If the injury requires treatment outside Hong Kong, those expenses are also claimable . Additionally, reasonable costs for prosthetic appliances and rehabilitation may be covered.
• Periodical Payments for Temporary Incapacity: If an employee is unable to work temporarily due to a work injury (or is on sick leave certified by a doctor), the employer must pay them compensation in the form of periodical payments. The rate is four-fifths (80%) of the employee’s average earnings before the injury, for each day off work . This ensures the employee still receives most of their wage during recovery (this is separate from any sick leave wages under the Employment Ordinance; ECO payments kick in typically after the sick leave exceeds a certain duration or for work-related cases specifically). These payments continue until the employee either recovers and returns to work, or until the injury is assessed to be permanent.
• Compensation for Permanent Incapacity: If the work injury results in permanent disability (partial or total), a lump sum compensation is payable. The amount depends on the employee’s pre-injury earnings and age, and the degree of disability. For permanent total incapacity, the formula is a multiple of earnings: e.g. 96 months’ earnings if the employee is under 40; 72 months if age 40 to under 56; 48 months if 56 or above, subject to minimum and maximum amounts . For permanent partial incapacity, the compensation is a proportion of the full compensation, proportional to the percentage loss of earning capacity as assessed . These age-banded formulas recognize that a younger worker losing full earning capacity warrants a larger payout (because they lose more working years). The law also specifies maximum “monthly earnings” for calculation purposes (e.g. as of 2023, the max earnings for calc is HK$36,550, and this was increased to HK$38,670 in 2025) .
• Compensation for Death: If an employee dies due to a work accident, the deceased’s family/dependants are entitled to a lump sum death compensation. Similar to permanent incapacity, it’s based on a multiple of the worker’s earnings: 84 months’ earnings if the deceased was under 40; 60 months for age 40 to under 56; 36 months for 56 or above (again subject to minimum amounts) . This is paid to the deceased’s relatives as defined by the law (spouse, children, parents, etc., according to priority). In addition, funeral expenses can be reimbursed up to a capped amount (currently HK$98,950) .
• Other Costs: The ordinance also provides for compensation for prostheses and surgical appliances, and for occupational diseases similarly as for injuries.
It’s important to note that these compensations are the statutory entitlements. An employee who recovers damages via common law (if they sue the employer for negligence and win) might have to offset that with what’s paid under ECO to prevent double recovery. But the employee can pursue common law damages separately if the employer was at fault and the common law sum (for pain, suffering, future losses, etc.) exceeds the statutory amounts.
Employer Obligations and Administration
The ECO places the responsibility for compensation on the employer. Employers are required to have Employees’ Compensation Insurance to cover this liability (as discussed in the Employee’s Compensation Insurance entry) . When a work accident occurs, the employer must promptly:
• Arrange or allow the employee to get medical attention.
• Notify the Commissioner for Labour within 14 days of any work accident causing injury (or within 7 days in case of death) – there are standard notice forms to file.
• Inform their insurance company to handle the claim.
Compensation is usually paid via the insurance. If disputes arise (e.g. disagreement on the degree of disability or whether an illness is work-related), the case may be referred to the Employees’ Compensation Assessment Board or to the courts for determination . The process is overseen by the Labour Department and a statutory fund (Employees Compensation Assistance Fund) exists to help pay compensation if an employer cannot (e.g. insurer insolvency or employer uninsured, though then the employer is penalized heavily).
Employers must not deduct any costs of the insurance or compensation from employees (penalties apply if they do) . They should also cooperate in the assessment process – for example, allowing the injured employee to go for medical assessments as required.
The ECO has been crucial in improving workplace safety awareness as well, since employers who maintain safe workplaces (thus fewer accidents) benefit from lower insurance premiums and less disruption.
In summary, the Employees’ Compensation Ordinance is the legal backbone ensuring workers injured on the job in Hong Kong are taken care of financially. It mandates a comprehensive, no-fault compensation scheme and requires employers to be prepared (through insurance) to meet these obligations. The law strikes a balance by providing set compensation amounts, giving certainty to both employees and employers, and by preventing the need for protracted litigation in most cases.
