Minimum Wage Ordinance

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Minimum Wage Ordinance
Hong Kong SAR Regional Emblem.svg
Legislative Council of Hong Kong
Citation Cap. 608
Enacted by Legislative Council of Hong Kong
Date passed 17 July 2010
Legislative history
Bill published on 26 June 2009
Introduced by Secretary for Labour and Welfare Matthew Cheung
First reading 8 July 2009
Second reading 15 July 2010
Third reading 17 July 2010

The Minimum Wage Ordinance Cap. 608 is an ordinance enacted by the Legislative Council of Hong Kong to introduce a minimum wage in Hong Kong in July 2010.[1] The executive branch proposed a minimum wage of HK$28 (~US$3.61) per hour in November 2010, which the Legislative Council voted to accept after much debate in January 2011.[2][3] It came into effect on 1 May 2011.[4] 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.[5]

History[edit]

Hong Kong had some legislation relating to the minimum wage as early as 1932; the Governor was granted the right, but was not obliged, to establish a minimum wage.[1] The 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.[6] However, no governor exercised these powers.[1] In 2006, legislators floated a proposal for a voluntary minimum wage.[1] The executive branch formed a Minimum Wage Provisional Commission in February 2009 to research and eventually set a proposed wage floor.[7]

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.[8] This earned him the derogatory nickname "Twenty-dollar Cheung".[fn 1] He later amended his proposal to HK$24.[9] Lam Woon-kwong of the Equal Opportunities Commission also indicated he had no objection to a lower minimum wage for disabled people.[10] 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 gave estimates that between 30,000 and 170,000 jobs would be lost as a result of the proposal, depending on the wage adopted.[1]

Passage of the Minimum Wage Bill[edit]

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 Tse, a functional constituency legislator representing the tourism sector.[11] 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.[12] The proposed minimum wage had been expected to be between HK$23 and HK$33 per hour.[1] Among the amendments:

  • Lee Cheuk-yan proposed including foreign domestic helpers in the scope of the bill. Defeated 9–26 with 17 abstentions.[11]
  • Lee Cheuk-yan proposed that overtime and commissions should be excluded from the minimum wage. Defeated.[11]
  • The government proposed an exemption of internships from the minimum wage legislation. Passed.[11]
  • The government proposed that the Trade Boards Ordinance should be repealed. Defeated 26–28.[11]

Setting and implementation of minimum wage[edit]

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.[2][12] The Legislative Council voted to accept the proposed wage on 5 January 2011.[3] It came into force on 1 May 2011.[4]

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.[13] 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.[14] 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 fees.[15]

Foreign domestic helpers[edit]

Foreign domestic helpers' minimum wages are inflation-adjusted annually for contracts about to be signed, and apply for the duration of the contract.[16] 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.[5]

The minimum wage for FDHs was reduced by HK$190 (5%) in 1999.[16] 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."[17] This led to lawsuits by some Filipinos in Hong Kong.[18] The minimum allowable wage was raised by HK$80 to HKHK$3,480 per month for contracts signed on or after 6 June 2007.[19] 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.[5]

Footnotes[edit]

  1. ^ 張廿蚊 (Jēung Yàhmān) or 廿蚊張 (Yàhmān Jēung). This can also mean "twenty dollars per sheet", as his surname "Cheung" is also a Chinese classifier used for flat objects.

References[edit]

  1. ^ a b c d e f "End of an experiment", The Economist, 15 July 2010, retrieved 20 July 2010 
  2. ^ a b "Chief Executive-in-Council adopts initial statutory minimum wage rate", Info.gov.hk, 10 November 2010, retrieved 12 November 2010 
  3. ^ a b Leung, Sophie; Lui, Marco (6 January 2011), "Hong Kong agrees to minimum wage as billionaires' wealth soars", Business Week, retrieved 18 April 2011 
  4. ^ a b Zhao, Shirley (12 April 2011), "The minimum wage debate", TimeOut Hong Kong, retrieved 18 April 2011 
  5. ^ a b c "Foreign Domestic Helpers", Frequently Asked Questions, Hong Kong: Immigration Department, 11 May 2009, retrieved 29 March 2010 
  6. ^ "Trade Boards Ordinance", Hong Kong Ordinances, Hong Kong Legal Information Institute, 1997, retrieved 21 July 2010 
  7. ^ "Provisional Minimum Wage Commission appointed", Info.gov.hk, 27 February 2009, retrieved 18 April 2011 
  8. ^ Lee, Diana (25 March 2010), "Legislator 'sorry' for mooting $20 minimum wage", The Standard, retrieved 23 April 2010 
  9. ^ "建議最低工資廿四元 茶餐廳員工指難維生", Headline News, 22 April 2010, retrieved 23 April 2010 
  10. ^ "Disabled could get lower minimum wage", Radio Television Hong Kong, 20 April 2010, retrieved 22 April 2010 
  11. ^ a b c d e Siu, Beatrice (16 July 2010), "Minimum wage bill on verge of becoming law", The Standard, retrieved 21 July 2010 
  12. ^ a b "Hong Kong OKs minimum wage law", The Times of India, 17 July 2010, retrieved 19 July 2010 
  13. ^ Lee, Diana (18 April 2011), "Angry employers warn of pricey lunch boxes", The Standard, retrieved 18 April 2011 
  14. ^ Olson, Robert (8 November 2010), "Asian Values: Penny-Pinching Tycoon Backs Down After Public Backlash", Forbes, retrieved 18 April 2011 
  15. ^ Lee, Colleen (15 April 2011), "Guards stand chance of paid meal breaks", The Standard, retrieved 18 April 2011 
  16. ^ a b "HK maids march against pay cuts", BBC News, 23 February 2003, retrieved 18 March 2007 
  17. ^ "Foreign domestic helper levy in effect from Oct", Press release, Hong Kong Government, 29 August 2003, retrieved 1 August 2008 
  18. ^ "OFWs sue HK over wage cuts", Philippine Headline News, 3 April 2003, retrieved 20 July 2010 
  19. ^ "Adjustment of minimum allowable wage for foreign domestic helpers", Press release, Hong Kong Government, 5 June 2007, retrieved 1 August 2008