Suppose you are interested in moving to Hong Kong to either study, live or work.
In that case, you will need to know about the minimum wage and salary for your desired profession to assess your potential standard of living.
Hong Kong has a statutory minimum wage set by the Minimum Wage Commission of the Labour Department, intended to protect the lowest earners in the country.
What is the Minimum wage in Hong Kong?
The Hong Kong Minimum Wage Ordinance came into effect in 2011, setting the statutory minimum wage for all workers.
This law intended to protect those in low-income jobs while allowing Hong Kong to remain competitive internationally.
The current minimum wage sits at HK$37.5 and applies to all workers based in Hong Kong, excluding domestic helpers.
The minimum wage statutory requirement applies across all of Hong Kong and does not vary depending on location.
There are only limited exceptions. For example, suppose you are a school or university student taking part in work experience or are a live-in domestic worker receiving free housing, or are in a situation where you are a family member living and working with your employer.
In that case, minimum wage may not be applicable.
The minimum wage is determined at an hourly rate and applies to all types of employment contracts, including part and full-time, day rates, piece rated, casual, and contracted staff.
Unlike countries such as the United Kingdom, the minimum wage does not depend on the workers' age.
However, minimum wage may not apply to student interns or work experience students in some situations.
For example, suppose a student is completing an internship or work experience as part of their course of education. In that case, the employer does not legally need to pay them the statutory minimum amount.
The government takes into account multiple factors to determine a balanced minimum wage rate.
These factors include the country's general economic and labor market condition, level of social inclusion, and the general public and stakeholder views.
Who does minimum wage apply to?
The Statutory Minimum Wage applies to all employees, which includes:
- Employees under any type of wage payment period (monthly, weekly, daily, hourly, or per piece basis)
- Employees under any type of employment contract (permanent, full-time, part-time, or casual).
Why is there a minimum wage?
The main reason why a minimum wage is fixed for all workers is to protect them against unduly low pay.
The minimum wage helps ensure a just and equitable minimum living wage for all employed and in need of such protection from exploitation.
While minimum wage intends to protect workers from exploitation, it is argued that minimum wage is not in line with inflation, putting those who earn at that level at a huge disadvantage.
Hong Kong is rated as one of the most expensive countries to live in, making minimum wage essential.
While the minimum wage provides some level of protection from exploitation, it does not necessarily mean that life is affordable on the minimum wage.
Employees with disabilities
Any employee with a disability enjoys the same protection as anyone else.
However, they also have the right to conduct a productivity assessment to determine whether they should be remunerated at not lower than the SME rate or at a rate commensurate with their productivity.
To find out more information about the assessment, please visit the Labour Department website here.
Calculate your minimum wage
The minimum wage every month is calculated by multiplying the total number of hours the employee worked by the minimum hourly wage rate.
You can use the Labour Department's Minimum Wage Reference Calculator to compute the minimum wage to serve as a reference quickly.
After entering all the basic information (working hours and wages) and generating a report, the program will calculate the amount of minimum wage the employee is entitled to and whether or not they are being paid that amount based on their current salary.
The Hong Kong government announced on 2nd February 2021 that the statutory minimum wage will be frozen at HKD 37.50 per hour for the next two years to 2023.
For the first time ever, the Hong Kong government has frozen the minimum wage since it was introduced on 1 May 2011.
The reason behind this decision was that most of the employer representatives on the Minimum Wage commission had already agreed to maintain the current minimum wage following the economic recession and high unemployment rate as a result of the Covid-19 pandemic,
However, the government's decision to pause the increase of the statutory minimum wage is doubtful.
This decision will have a negative impact on low-income families and poverty, as the purchasing power of the current minimum wage will be compromised due to the rising inflation rate.
Low-income workers have raised concerns regarding their compromised standard of living will fall as the prices of consumer products will still continue to rise in response to the Covid-19 pandemic.
If you are looking to relocate and work in Hong Kong, you should understand how the minimum wage works to ensure that you are not being exploited by your employee and are being paid the correct wage as required by law.
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