On 16 January 2015, the Chief Executive in Council gazetted a legal notice to increase the statutory minimum wage in Hong Kong for the second time. Hong Kong’s minimum wage is therefore set to increase from its current rate of HKD 30 per hour, to HKD 32.50 per hour (equivalent to USD 4.20 per hour).

Subject to the Legislative Council’s approval, the new rate is expected to come into force on 1 May 2015. To reflect the amendment, the monthly monetary cap on recording the total number of hours worked will also increase from HKD 12,300 to HKD 13,300 per month.

Employers found guilty of failing to pay at least the minimum wage to their employees are liable to pay a fine of HKD 350,000 and to imprisonment for three years. Employers should therefore ensure they update their payroll systems where necessary to reflect the increased rate of pay.

In addition, the Minimum Wage Ordinance requires the Minimum Wage Commission to report certain statistics to the Chief Executive in Council at least once every 2 years. In its 2014 report, the Minimum Wage Commission reported that:

• there are currently approximately 150,000 employees in Hong Kong who earn less than HKD 32.50 per hour;
• employers will be required to pay an additional HKD 1.36bn per year due to the new minimum wage rate; and
• the new minimum wage rate would lead to a 0.2% increase in the current rate of unemployment rate.

For further information, please contact:

Gareth Thomas, Partner, Herbert Smith Freehills

gareth.thomas@hsf.com

Dominic Geiser, Partner, Herbert Smith Freehills

dominic.geiser@hsf.com

 
Justin D’Agostino, Partner, Herbert Smith Freehills

Julian Copeman, Herbert Smith Freehills

julian.copeman@hsf.com

William Hallat, Herbert Smith Freehills

william.hallatt@hsf.com

Homegrown Labour & Employment Law Firms in Hong Kong