How to employ in Macau – Macau Focus

Lou Sio Fong

Macau SAR is a small city with the highest population density in the world and is renowned for its casinos. It is the world's largest gambling hub by revenue, which represented about 40% of Macau's GDP in 2013, and a growing number of individuals and companies contribute to sustain its soaring economy.

Macau is one of the fastest growing economies with a top-ranking GDP. Because of its soaring development, Macau has nearly matched the concept of “full employment” as was recently noted by local economists (with over 376,000 people employed and current unemployment rate steadily hovering around 1.7%).

More and more foreign investors are attracted to business and investment opportunities in Macau, through various small, medium and large enterprises of foreign ownership or local collaboration projects. However, the local resident population is not large enough to catch up with the rocketing economy. A large number of foreign labourers have entered Macau to look for work opportunities – the number of non-resident employees was well over 140,000 in the last quarter of 2013.

The legal framework

The government's policy regarding human resources, specifically on the import of foreign labour, is channelling the demand to local resident workers who are prioritised over non-resident workers if both are found to be in equal circumstances. This policy aims to keep a sound equilibrium between the conditions offered to resident workers and those offered to NRW.

Two main laws in force, namely Law 7/2008, the Labour Relations Law with resident workers, and Law 21/2009, put in operation by Administrative Regulations no 8/2010 and 13/2010 in its most recent version provided by Law 4/2013, the Non-Resident Workers Law, regulate the rights and obligations of each party. The Labour Relations Law´s main rights, obligations and guarantees are generally applicable to an employment relationship of a non-resident worker.

The main principles of the Labour Relations Law include:

Contract and formalities

A labour contract may have a fixed, variable or indefinite term. There is no mandatory form, and hiring may be concluded verbally or in writing, except if minors (14 to 18 years old) are being employed.

Probation period

There shall be a probationary period in the contract, during which parties may assess their interest in continuing the relationship of employment (unless both parties express to waive the period). The duration of the probationary period may be freely set out by the parties; if not expressly agreed to, it shall be deemed to have a duration of 90 days for most employees; 180 days for employees whose work is of a highly technical nature or involves special qualifications, as well as for employees who hold leadership and management positions, while it is 30 days for employees under term contracts.

Working hours and overtime compensation

Normal working hours shall not exceed 8 hours a day and 48 hours per week. The employer may decide, according to the characteristics of its business and by agreement with the employee, whether the daily working hours shall exceed these hours (other statutory limitations apply). If night or shift work is not within the scope of the employment contract, night work is compensated with an accrual of 20% to standard salary and shift work with an accrual of 10%, enabling greater flexibility. Moreover, highlighting the high degree of autonomy given to parties, the Labour Relations Law allows the performance of work during holidays, under certain conditions. Lastly, overtime compensation accrues and entitlements to enjoy additional rest days may apply.

Rest days, public holidays and paid leave

Mandatory weekly rest is 24 hours, which can be freely changed with both parties´ agreement.

Mandatory holidays in Macau are: January 1; Lunar New Year (the first, second and third day of the first month of the Lunar Year); Qing Ming Festival; May 1; the day after the Mid-autumn Festival; October 1; Chong Yang Festival; and December 20.

Annual mandatory leave for employees who have worked for over one year is six working days; if the duration of the labour relation is less than one year but more than three months, the employee is entitled to half a day's leave for every one month of actual service in the second year of service. Remunerated mandatory sick leave is six days a year and remunerated maternity leave is 56 days.

Basic remuneration and bonuses

According to the Labour Relations Law, basic remuneration means all regular monetary payments, irrespective of name or form of calculation, is payable to the employee for work performed in accordance with an agreement between the employer and the employee (or by legal regulation). Also, bonuses are included under the definition of variable remuneration and include all non-regular remunerations paid by the employer to the employee in accordance with an agreement between the employer and the employee, such as allowances, complementary bonuses, commissions, and tips.

Termination

The labour contract may be terminated by:

• Revocation – termination by mutual consent without any compensation being due;
• Rescission – unilateral termination by employer or employee (excluding situations of early termination in the probationary period) with or without just cause;
• Expiry – when the employee becomes incapable of working, especially on grounds of chronic illness or disability, or dies, the employment contract expires; or
• Denunciation – The employment contract is freely terminated by either party during the probationary period.

The employer shall make all termination payments due, as applicable, within nine working days after the termination of the employee.

Labour disputes

In case of a labour dispute arising from an employment relation subject to the Labour Relations Law, either party may bring the case to the consideration of the Labour Court installed with the First Instance Court (FIC). The Labour Department is the authority who supervises the compliance of key aspects of the labour relationship and is therefore legally entitled to sanction certain contraventions with penalties.

Applying for non-resident workers

The Non-Resident Workers Law set out some special, mandatory provisions that differ from the solutions provided in the Labour Relations Law – execution, performance and cessation of a labour contract.

Relevant authority and application

The relevant authority in Macau to accept applications to hire a non-resident worker is the Human Resources Office (HRO). The prospective employer shall present his application to the HRO to hire a non-resident worker under the terms set out in the Non-Resident Workers Law.

Who can be hired

With respect to employees, foreign persons who are not entitled to residency in Macau may be granted the authorisation to work in Macau under a non-resident title, which lawfully (under the Non-Resident Workers Law) allows the intended employee to work in Macau as one of three categories: specialised and qualified worker; non-specialized worker; or domestic worker.

Who can hire

As a general rule regarding employers, the following categories of local individuals and collective entities are entitled to submit an application to the HRO with the purpose of hiring one or more non-resident worker employee(s): Macau residents; legal persons (including commercial company) headquartered or established in Macau; non-residents who have a commercial or industrial enterprise in Macau; and civil servants/public employees, Macau officials of the PRC government, consular representatives in Macau, specialised workers authorised to work in Macau.

Foreigners are indirectly allowed to hire staff by utilising a business vehicle such as a limited liability company (LLC).

Services provided by foreign companies

Illegal work

Administrative Regulation 17/2004, the Regulation on the Prohibition of Illegal Work, bars unlawful accepting or rendering of work and sets corresponding penalties. For the purpose of the Regulation, illegal work is considered as such if being provided by:

• A non-resident who does not have the necessary authorisation to exercise an activity for another party, even if not paid;
• A non-resident who, despite having the necessary authorisation to work for another party, is working, with or without pay, for an entity other than the one that applied for his employment;
• A non-resident who, despite having the necessary authorisation to work for another party, is working in breach of other conditions of employment imposed by the respective act of authorisation; or
• A non-resident who exercises a self-supporting activity disregarding mandatory prior authorisation.

Assistance agreements

Being tightly supervised and limited, one of the exceptions to the types of illegal work listed above is an agreement concluded between enterprises, on one side, one that has a registered office located outside Macau; and from the Macau side, individuals or who have a registered office in Macau. The scope of the agreement of both parties shall be: the foreign company performing certain specific or occasional works or services, including guidance, technical, quality control or supervision services.

The Macau company shall, in this case, control and keep an updated record regarding each displaced foreign employee, ensuring he does not provide service for more than 45 working days (continuously or separately) within any six-month period, nor being remunerated, for any reason, by the Macau company. This period begins on the day the non-resident first legally enters Macau.

Applying for Macau residency

Under the terms of Administrative Regulation no 3/2005, foreign persons who intend to apply for residence in Macau as prospective investors or current investors; managerial personnel; and specialised technical personnel may submit an application for temporary residency to the Trade and Investment Promotion Institute.

Applicants of the latter two categories must submit a copy of the employment contract/promissory-contract, proving the intended labour bind with a Macau-based company, along with several other relevant documents. The Trade and Investment Promotion Institute is authorised to a high degree of discretion when assessing the need to fill the intended employment position with a foreign prospective employee.

Following approval of the application for temporary residency, applicants shall then apply to the Foreigners Sub-Division of the Immigration Department for a Residence Receipt, with which applicants can in turn apply for a Macau Non-Permanent Resident Identity Card to the Identification Bureau.