Hong Kong’s minimum wage to increase by 5.25% from HK$40 to HK$42.10 per hour

Hong Kong’s lowest-paid workers will get HK$2.10 (27 US cents) an hour more in their wages, from the current HK$40 to HK$42.10, under a recommendation adopted by the government’s key decision-making Executive Council. The government announced on Tuesday that Exco had accepted the recommendation of the Minimum Wage Commission to raise the statutory minimum wage by 5.25 per cent, the first increase after a new formula for adjusting the rate was passed last year. The proposed increase will be presented to the Legislative Council on Wednesday next week. Subject to Legco’s approval, the revised rate will come into effect on May 1. “The [commission] believes that the new statutory minimum wage rate can maintain an appropriate balance between forestalling excessively low wages and minimising the loss of low-paid jobs, while giving due regard to sustaining Hong Kong’s economic growth and competitiveness,” chairwoman Priscilla Wong Pui-sze said. Secretary for Labour and Welfare Chris Sun Yuk-han said the rate formula was suitable. “The biggest benefit of the formula for workers on the minimum wage is that their salary will not be reduced,” he said, adding that employees would be able to share the gains of economic growth while inflation would be factored in. Sun said that while not many people were on the lowest pay, the adjustment would also benefit other workers who were on the lower salary threshold. “There should be a certain ripple effect. We saw there were also adjustments to salaries of lower levels,” Sun said, referring to previous increases. He said the formula also provided employers with an estimate on how much to add to their workers’ salaries. Under the mechanism, the formula for calculating the wage level each year includes factors such as the consumer price index (A), gross domestic product growth and average GDP growth over the past 10 years. The 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, which are in the relatively low expenditure range. Labour Advisory Board member Jenny Tam Kam-lin, who is also the vice-chairwoman of the Federation of Hong Kong and Kowloon Labour Unions, said the proposed increase was below reasonable levels but “better than nothing” to tackle inflation. There was a significant gap in the latest minimum wage compared with a reasonable figure, her federation argued. She set the figure at HK$50, which was based on considerations for a household of two members receiving government allowances under the Comprehensive Social Security Assistance scheme. Tam added that while the formula adopted last year was a good initiative, the weighting for the GDP factor should be increased. She said she hoped the government would review the formula as it had promised. Cleaner Lau Chung, 67, collects waste in two buildings and earns HK$45 per hour. He said HK$50 would be more reasonable in dealing with rising inflation, while complaining that his expenses for his rented cage home had jumped from HK$3,000 to HK$3,500 last year, not including additional water and electricity fees. “Inflation is really outrageous now. A two-dish rice meal costs HK$30 today but might be HK$35 tomorrow,” he said. Johnnie Chan Chi-kau, former president of the Hong Kong Association of Property Management Companies, said the adjustment was reasonable for both employers and workers. “Everyone understands that the economy has been slow, but inflation has risen, so we as employers regard this as a reasonable measure to add a little bit more for the employees,” he said. He said companies currently could not recruit workers at the minimum wage and the level had become more symbolic than practical for the sector. Because of the rise in the minimum wage, the monthly monetary cap on the requirement for employers to record employees’ working hours will also be raised, from HK$16,300 per month to HK$17,200. Employers will not need to record the working hours of their employees unless their monthly salary is below the threshold. The last increase in the minimum wage was made two years ago. Chief Executive John Lee Ka-chiu announced in his policy address last year that the government would review the minimum wage annually.

Hong Kong’s minimum wage to increase by 5.25% from HK$40 to HK$42.10 per hour

Government accepts Minimum Wage Commission’s recommendation, with revised rate coming into effect on May 1 pending Legco approval