Minimum wage in Hong Kong
Encyclopedia
The Legislative Council
voted to introduce a minimum wage in Hong Kong in July 2010. The executive branch proposed a minimum wage of HK$28 (~US$3.60) per hour in November 2010, which the Legislative Council voted to accept after much debate in January 2011. It came into effect on 1 May 2011. Prior to this, there had also been a fixed minimum wage for one specific class of workers, foreign domestic helpers
, of HK$3,740/month.
was granted the right, but not the obligation, to establish a minimum wage. The 1940 Trade Boards Ordinance also gave the governor (and after 1997, the Chief Executive) the power to set minimum wages for piece-rate and time-rate work, and established penalties for non-compliance. However, no governor exercised these powers. In 2006, legislators floated a proposal for a voluntary minimum wage. The executive branch formed a Minimum Wage Provisional Commission in February 2009 to research and eventually set a proposed wage floor.
More debate came about on the possibility of a minimum wage in 2010. Legislator Tommy Cheung
, who represents the catering functional constituency
, suggested that the minimum wage be no greater than HK$20. This earned him the derogatory nickname "Twenty-dollar Cheung". He later amended his proposal to HK$24. Lam Woon-kwong of the Equal Opportunities Commission
also indicated he had no objection to a lower minimum wage for disabled people. Chief Executive
Donald Tsang
was opposed to the whole concept of a minimum wage, according to legislator Lee Cheuk-yan of the Hong Kong Confederation of Trade Unions
. Other voices of opposition included the free-market think tank Lion Rock Institute
, as well as Miriam Lau
of the Liberal Party
, who claimed that between 30,000 and 170,000 jobs would be lost as a result of the proposal, depending on the wage adopted.
, a functional constituency legislator representing the tourism sector. The bill required the Chief Executive to propose a minimum wage level, which LegCo would then either approve or reject the amount. The law did not give LegCo the power to amend the amount. The proposed minimum wage had been expected to be between HK$23 and $33 per hour. Among the amendments:
The law does not mandate that meal breaks and rest days be paid; Secretary for Labour and Welfare
Matthew Cheung
stated that this should be decided by private negotiation between employers and employees. There were fears that the implementation of the law might actually lead to lower take-home pay for low-income workers who currently receive paid meal breaks. In November 2010, before the minimum wage came into effect, fast-food chain Cafe de Coral had forced staff to sign new contracts that would give them a pay raise but see their paid meal breaks forfeited, effectively leading to lower pay. In April 2011, Edward Cheng, president of the Hong Kong Association of Property Management Companies, the largest property management
association in Hong Kong, stated that he would appeal to their members to retain paid meal breaks for estate security guards where possible; however, he pointed out that the property owners themselves would have to approve any consequent increases in management fee
s.
' minimum wages are inflation-adjusted annually for contracts about to be signed, and apply for the duration of the contract. Furthermore, FDHs are entitled to one 24-hour rest period each week. An employer's failure to meet this minimum level may result in a fine as high as HK$350,000 and three years' imprisonment.
The minimum wage for FDHs was reduced by HK$190 (5%) in 1999. Again in April 2003, in a deflationary environment, the Government announced a HK$400 reduction in pay, to HK$3,270, "due to the steady drop in a basket of economic indicators since 1999." This led to lawsuits by some Filipinos in Hong Kong
. The minimum allowable wage was raised by HK$80 to HKHK$3,480 per month for contracts signed on or after 6 June 2007. Another HK$100 cost of living adjustment took effect for all employment contracts signed on or after 17 July 2008, increasing the minimum wage to HK$3,580 per month.
Legislative Council of Hong Kong
The Legislative Council is the unicameral legislature of Hong Kong.-History:The Legislative Council of Hong Kong was set up in 1843 as a colonial legislature under British rule...
voted to introduce a minimum wage in Hong Kong in July 2010. The executive branch proposed a minimum wage of HK$28 (~US$3.60) per hour in November 2010, which the Legislative Council voted to accept after much debate in January 2011. It came into effect on 1 May 2011. Prior to this, there had also been a fixed minimum wage for one specific class of workers, foreign domestic helpers
Foreign domestic helpers in Hong Kong
Foreign domestic helpers in Hong Kong are foreign domestic workers and housemaids employed by Hongkongers, typically families. They make up approximately 3% of the population of Hong Kong and an overwhelming majority of them are women...
, of HK$3,740/month.
Attempts at legislation
Hong Kong had some legislation relating to the minimum wage as early as 1932; the colonial governorGovernor of Hong Kong
The Governor of Hong Kong was the head of the government of Hong Kong during British rule from 1843 to 1997. The governor's roles were defined in the Hong Kong Letters Patent and Royal Instructions...
was granted the right, but not the obligation, to establish a minimum wage. The 1940 Trade Boards Ordinance also gave the governor (and after 1997, the Chief Executive) the power to set minimum wages for piece-rate and time-rate work, and established penalties for non-compliance. However, no governor exercised these powers. In 2006, legislators floated a proposal for a voluntary minimum wage. The executive branch formed a Minimum Wage Provisional Commission in February 2009 to research and eventually set a proposed wage floor.
More debate came about on the possibility of a minimum wage in 2010. Legislator Tommy Cheung
Tommy Cheung
Tommy Cheung Yu-yan, SBS, JP is a member of the Legislative Council of Hong Kong , representing the catering industry in functional constituencies seats. He was a member of the Liberal Party.-Career:...
, who represents the catering functional constituency
Functional constituency
In the political systems of Hong Kong and Macau, a functional constituency is a professional or special interest group involved in the electoral process...
, suggested that the minimum wage be no greater than HK$20. This earned him the derogatory nickname "Twenty-dollar Cheung". He later amended his proposal to HK$24. Lam Woon-kwong of the Equal Opportunities Commission
Equal Opportunities Commission (Hong Kong)
Equal Opportunities Commission is a statutory body responsible for implementing the Sex Discrimination Ordinance, the Disability Discrimination Ordinance, the Family Status Discrimination Ordinance and the Race Discrimination Ordinance in Hong Kong...
also indicated he had no objection to a lower minimum wage for disabled people. Chief Executive
Chief Executive of Hong Kong
The Chief Executive of Hong Kong is the President of the Executive Council of Hong Kong and head of the Government of the Hong Kong Special Administrative Region. The position was created to replace the Governor of Hong Kong, who was the head of the Hong Kong government during British rule...
Donald Tsang
Donald Tsang
Sir Donald Tsang Yam-kuen, GBM, KBE is the current Chief Executive and President of the Executive Council of the Government of Hong Kong....
was opposed to the whole concept of a minimum wage, according to legislator Lee Cheuk-yan of the Hong Kong Confederation of Trade Unions
Hong Kong Confederation of Trade Unions
The Hong Kong Confederation of Trade Unions is a pro-democracy labour and political group in the Hong Kong. It was established in 1990...
. Other voices of opposition included the free-market think tank Lion Rock Institute
The Lion Rock Institute
The Lion Rock Institute is a non-profit, public policy think tank that advocates free market solutions for Hong Kong's policy challenges. Founded in 2004, The Lion Rock Institute remains Hong Kong's only independent free-market think tank...
, as well as Miriam Lau
Miriam Lau
Miriam Lau Kin Yee, GBS, OBE, JP , former married name Miriam Lau Lau Kin Yee, is a member of the Legislative Council of Hong Kong , representing the transport industry functional constituency...
of the Liberal Party
Liberal Party (Hong Kong)
Liberal Party is a business-friendly liberal conservative political party in Hong Kong.-Party beliefs:The party is known for its conservative and business-friendly policies. Despite being a political party friendly with Beijing, it fits in the centre-right political spectrum...
, who claimed that between 30,000 and 170,000 jobs would be lost as a result of the proposal, depending on the wage adopted.
Passage of Minimum Wage Bill
The Minimum Wage Bill was passed on 15 July 2010 by a vote of 53–1 after extensive debate which included the tabling of 34 amendments. The lone opposition vote came from Paul TsePaul Tse
Paul Tse Wai-chun is a Hong Kong solicitor, who advertises himself as the "Superman of Law". He also owns a small travel agency and was elected to the Legislative Council of Hong Kong for the tourism functional constituency in the 2008 legislative election...
, a functional constituency legislator representing the tourism sector. The bill required the Chief Executive to propose a minimum wage level, which LegCo would then either approve or reject the amount. The law did not give LegCo the power to amend the amount. The proposed minimum wage had been expected to be between HK$23 and $33 per hour. Among the amendments:
- Lee Cheuk-yan proposed including foreign domestic helpers in the scope of the bill. Defeated 9–26 with 17 abstentions.
- Lee Cheuk-yan proposed to exclude overtime payment and commissions from the minimum wage. Defeated.
- The government proposed exempting internships from the minimum wage. Passed.
- The government proposed abolishing the Trade Boards Ordinance. Defeated 26–28.
Setting and implementation of minimum wage
On 10 November 2010, a HK$28 (~US$3.60) per hour rate was recommended by the Provisional Minimum Wage Commission and adopted by the Chief Executive-in-Council. The Legislative Council voted to accept the proposed wage on 5 January 2011. It came into force on 1 May 2011.The law does not mandate that meal breaks and rest days be paid; Secretary for Labour and Welfare
Secretary for Labour and Welfare
The Secretary for Labour and Welfare of the Hong Kong Government is responsible for labour and social welfare policy in Hong Kong. The position was created in 2007 to replace portions of the previous portfolio of Secretary for Economic Development and Labour and welfare portion from Secretary for...
Matthew Cheung
Matthew Cheung
Matthew Cheung Kin-chung, GBS, JP is the Secretary for Labour and Welfare in the Hong Kong Government.Matthew Cheung served as civil servant in the Information Officer Grade of the government in 1972, and he transferred to the Administrative Service in 1979...
stated that this should be decided by private negotiation between employers and employees. There were fears that the implementation of the law might actually lead to lower take-home pay for low-income workers who currently receive paid meal breaks. In November 2010, before the minimum wage came into effect, fast-food chain Cafe de Coral had forced staff to sign new contracts that would give them a pay raise but see their paid meal breaks forfeited, effectively leading to lower pay. In April 2011, Edward Cheng, president of the Hong Kong Association of Property Management Companies, the largest property management
Property management
Property management is the operation, control of ususally on behalf of an owner, and oversight of commercial, industrial or residential real estate as used in its most broad terms. Management indicates a need to be cared for, monitored and accountability given for its usable life and condition...
association in Hong Kong, stated that he would appeal to their members to retain paid meal breaks for estate security guards where possible; however, he pointed out that the property owners themselves would have to approve any consequent increases in management fee
Management fee
In the investment advisory industry, a management fee is a periodic payment that is paid by investors in a pooled investment fund to the fund's investment adviser for investment and portfolio management services.-Mutual funds:...
s.
Foreign domestic helpers
Foreign domestic helpersForeign domestic helpers in Hong Kong
Foreign domestic helpers in Hong Kong are foreign domestic workers and housemaids employed by Hongkongers, typically families. They make up approximately 3% of the population of Hong Kong and an overwhelming majority of them are women...
' minimum wages are inflation-adjusted annually for contracts about to be signed, and apply for the duration of the contract. Furthermore, FDHs are entitled to one 24-hour rest period each week. An employer's failure to meet this minimum level may result in a fine as high as HK$350,000 and three years' imprisonment.
The minimum wage for FDHs was reduced by HK$190 (5%) in 1999. Again in April 2003, in a deflationary environment, the Government announced a HK$400 reduction in pay, to HK$3,270, "due to the steady drop in a basket of economic indicators since 1999." This led to lawsuits by some Filipinos in Hong Kong
Filipinos in Hong Kong
There are around 140,000 Filipinos in Hong Kong, a lot of whom work as foreign domestic helpers. Filipino maids are known by the locals as fei yung , fei being the first character in the Cantonese phonetic translation of Philippines and yung means maid...
. The minimum allowable wage was raised by HK$80 to HKHK$3,480 per month for contracts signed on or after 6 June 2007. Another HK$100 cost of living adjustment took effect for all employment contracts signed on or after 17 July 2008, increasing the minimum wage to HK$3,580 per month.