Hong Kong: Second minimum wage increase

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 HK$30 per hour, to HK$32.50 per hour (equivalent to US$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 HK$12,300 to HK$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 HK$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 HK$32.50 per hour;
• employers will be required to pay an additional HK$1.36 billion 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.