Retention Letter To Employee for Hong Kong

Retention Letter To Employee Template for Hong Kong

A retention letter to employee is a formal document used in Hong Kong to outline the terms and conditions under which an employee is offered additional incentives to remain with the company for a specified period. The document, governed by Hong Kong employment law including the Employment Ordinance (Cap. 57), typically details the retention bonus or incentive package, payment conditions, retention period, and any additional terms while ensuring compliance with local labor regulations. It serves as a legally binding modification to the existing employment contract, specifically designed to secure the continued service of valuable employees while protecting both employer and employee interests under Hong Kong law.

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What is a Retention Letter To Employee?

A Retention Letter to Employee is commonly used in Hong Kong business environments during periods of significant organizational change, such as mergers, acquisitions, restructuring, or critical project implementations. It's designed to secure the continued employment of key personnel by offering additional compensation or benefits. The document must comply with Hong Kong's Employment Ordinance (Cap. 57) and related employment legislation, making it essential to carefully structure the terms and conditions. The letter typically specifies the retention period, bonus amount, payment schedule, conditions for payment, and any performance requirements. It's particularly important during times when employee retention is crucial for business continuity or when specific expertise is needed for important initiatives. The document serves as an addendum to the existing employment contract and must be drafted to ensure enforceability under Hong Kong law while maintaining clarity and fairness in its terms.

What sections should be included in a Retention Letter To Employee?

1. Letter Header: Company letterhead, date, and employee's contact details

2. Salutation: Formal greeting addressing the employee by name

3. Opening Acknowledgment: Recognition of employee's contribution and value to the company

4. Purpose Statement: Clear statement of the letter's purpose to retain the employee

5. Retention Period: Specific timeframe for which the retention arrangement applies

6. Retention Payment/Incentive: Details of the retention bonus or incentive amount and payment terms

7. Payment Conditions: Conditions that must be met to receive the retention payment

8. Current Employment Terms: Confirmation that other employment terms remain unchanged

9. Confidentiality: Statement regarding the confidential nature of the retention arrangement

10. Acceptance Process: Instructions for accepting the retention offer

11. Closing: Formal closing, signature block, and company representative details

What sections are optional to include in a Retention Letter To Employee?

1. Performance Metrics: Specific performance expectations or KPIs that must be met during the retention period, include when retention payment is tied to performance

2. Additional Benefits: Any extra benefits or incentives beyond the basic retention payment, include when offering enhanced benefits package

3. Special Projects: Details of specific projects or responsibilities during the retention period, include when retention is linked to particular initiatives

4. Non-Compete Provisions: Additional non-compete or restrictive covenant terms, include when new restrictions are part of retention

5. Early Termination Provisions: Handling of retention payment in case of early termination, include when specific scenarios need to be addressed

6. Tax Treatment: Explanation of tax implications of the retention payment, include when tax treatment needs clarification

What schedules should be included in a Retention Letter To Employee?

1. Schedule A - Payment Structure: Detailed breakdown of retention payment structure if paid in installments or subject to multiple conditions

2. Schedule B - Performance Metrics: Detailed description of performance targets or KPIs if applicable

3. Schedule C - Benefits Summary: Summary of additional benefits or changes to existing benefits package

4. Appendix 1 - Acceptance Form: Form for the employee to sign and return indicating acceptance of retention terms

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

Hong Kong

Publisher

Genie AI

Cost

Free to use
Relevant Industries

Financial Services

Technology

Manufacturing

Professional Services

Retail

Healthcare

Telecommunications

Real Estate

Construction

Education

Hospitality

Logistics

Media and Entertainment

Energy

Insurance

Relevant Teams

Human Resources

Legal

Finance

Information Technology

Operations

Sales

Marketing

Research and Development

Product Development

Customer Service

Engineering

Quality Assurance

Business Development

Strategy

Compliance

Relevant Roles

Chief Executive Officer

Chief Financial Officer

Chief Technology Officer

Department Head

Senior Manager

Project Manager

Technical Lead

Senior Developer

Key Account Manager

Senior Analyst

Product Manager

Research Director

Principal Engineer

Senior Consultant

Operations Manager

HR Director

Legal Counsel

Financial Controller

Sales Director

Regional Manager

Industries
Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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