Hong Kong minimum wage expected to rise by HK$1.80 to HK$41.80 per hour this year: sources
- According to a source close to Minimum Wage Commission, the existing HK$40 hourly rate is set to increase by HK$1.80
- Minimum wage will also be reviewed annually, rather than every two years, insider says
Hong Kong will raise the minimum wage by HK$1.80 to HK$41.80 (US$5.34) per hour this year and introduce a formula for future adjustments that will not allow pay cuts, the Post has learned.
The minimum wage will also be reviewed annually, rather than every two years.
According to a source close to the city’s Minimum Wage Commission, the existing HK$40 hourly rate is expected to increase by HK$1.80, a 4.5 per cent rise.
The commission was also expected to formalise the review process through introducing a formula that would consider factors such as the consumer price index (A), current gross domestic product growth and average GDP growth in the past 10 years, the insider said.
The consumer price index reflects changes in the cost of consumer goods and services generally bought by households. Index (A) relates to about 50 per cent of households in the city, which are in the relatively low expenditure range.
The formula would ensure the future minimum wage was not lowered from the current rate, the source added.
The proposal, tabled by the commission last October, is pending the approval of the government’s key decision-making Executive Council before it is submitted to the Labour Advisory Board, consisting of both employer and employee representatives, for deliberation.
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Lawmaker Aron Kwok Wai-keung of the labour functional constituency said the 4.5 per cent increase was “certainly not satisfactory but understandable” given Hong Kong’s economic prospects were not too promising.
“The more important thing here is the once-in-a-year review, which is a long overdue call from the labour sector. The annual review will provide employees with stronger protection, ensuring no delays for salary adjustment,” he said.
Denny To chun-ho, general secretary of the Cleaning Service Industry Workers Union, welcomed the introduction of the formula, saying it would allow employees to enjoy the fruits of the city’s economic development.
“But the problem is the amount of the minimum wage. The entry level was so low,” said To, referring to the initial rate of HK$28 an hour when the minimum wage was introduced in 2011.
“Now even standing at over HK$40, it still can’t meet the basic life needs of an average low-paid employee.”
But lawmaker Michael Lee Chun-keung, vice-chairman of the pro-business Liberal Party, said employers had expressed concerns over the proposal, as it was tabled at a time when firms were still struggling following the pandemic.
“To conduct the review once a year means employers need to renew contracts with the same frequency. That will surely add to the administrative costs employers shoulder,” he said.
Lee added that the business sector had also expressed hopes that the current minimum wage mechanism would be maintained.
Hong Kong introduced the statutory minimum wage 13 years ago to provide protection for low-paid workers.
The rate, fixed by the government after considering the commission’s recommendations, was reviewed every two years and adjusted to HK$37.50 in 2019. The amount remained frozen in 2021 amid the Covid-19 slump.
Last year, it was raised to HK$40 an hour, an increase of about 6.7 per cent, on May 1.
Secretary for Labour and Welfare Chris Sun Yuk-han on Sunday said the government would announce its decision on adjusting the minimum wage mechanism in days as the administration promised to respond to the commission’s proposal in half a year.
