New guaranteed rate of HK$28 per hour for employees to take effect from May 1

Hong Kong's HK$28 an hour minimum wage has passed its final hurdle and will become law May 1. A motion to scrap the landmark legislation by League of Social Democrats member Leung Kwok-hung was voted down by legislators. Leung advocated that the minimum wage be raised, making it closer to the HK$33 dollars per hour proposed by labor and social welfare organizations.

An amendment proposed by Unionist member, Lee Cheuk-yan to advance the implementation date for the legislation to February was also defeated. In proposing his amendment, Lee disputed arguments by employers that they needed time to prepare for the legislation. Lee said employers already had more than enough time to prepare.

Because the bill took the form of subsidiary legislation, lawmakers either could support or oppose it but they could not alter the HK$28 rate. Over 310,000 low-paid workers stand to benefit from pay rises.

The principal legislation, which was passed last July, stipulates a wage review at least once in two years. Many legislators, especially unionist lawmakers, urged the government to conduct annual reviews to ensure the minimum wage remains current with economic conditions.

Responding to the motion, Secretary for Labour and Welfare Matthew Cheung said the wage rate was a hard-won result of evidence-based research and the consensus of thorough consultation across the board. Some 314,600 people or 11.3 percent of the workforce now may expect pay raises of up to 16.9 percent, he said. If the wage minimum had been amended or the bill defeated, it would have been a lose-lose situation for employers and employees since implementation of any minimum wage would be seriously delayed.

Cheung pledged there will be a wage review as soon as economic data is available in February 2012.

Lee Cheuk-yan, said that while the Hong Kong Confederation of Trade Unions, supports a HK$33 minimum wage, he preferred to accept HK$28 rather than to trust in the faint hope that the government would come back with a better offer. The mechanism is lagging behind in several aspects, he stressed, since only economic data of 2009 second quarter was used in setting the rate.

Wong Kwok-hing, from the Hong Kong Federation of Trade Unions, said the majority of the unions reluctantly accepted the $28 hourly rate. As their fight for minimum wage has come to the final stage, he said their efforts over the past decade would be wasted if the rate was repealed the nullifying the bill.

Catering constituency lawmaker Tommy Cheung said the HK$28 rate would increase companies' operating costs, since 30 percent of catering industry workers would be entitled to wage increases. But he disagreed with any proposal to nullify the proposed minimum and start the process all over.

China Daily

(HK Edition 01/06/2011 page1)