Hong Kong’s Chief Executive-in-Council last week adopted the Minimum Wage Commission’s (MWC) recommendation to raise the statutory minimum wage from HKD 37.50 (USD 4.80) per hour to HKD 40.00 (USD 5.12).

According to the South China Morning Post, this means that nearly 90,000 of Hong Kong’s lowest-paid workers will get HKD 2.50 (USD 0.32) an hour more, after a four-year freeze on wages. However, it is estimated the increase of about 6.7% could add as much as HKD 910 million (USD 116.5 million) a year to wages bills for employers.

The revised minimum wage will come into force on 1 May 2023.

Secretary for Labour & Welfare Chris Sun said the commission has ably discharged its statutory function of reviewing the minimum wage rate after thorough and balanced deliberation.

“The government accepts the recommendation of the MWC, and considers that the new rate will be conducive to the overall interest and development of Hong Kong,” Sun said.

Hong Kong introduced the statutory minimum wage in 2011 to provide protection for low-paid employees and set the amount at HKD 28 (USD 3.59) an hour. The rate was increased every two years and hit HKD 37.50 (USD 4.80) in 2019 and stayed at this rate until now. Authorities blamed an economy battered by the effects of the Covid-19 pandemic for the change in policy.

Another amendment that was announced last week was the monthly monetary cap on recording the total number of hours worked. An employer will be exempted from the requirement to record the total number of hours worked by an employee who is paid at least HKD 16,300 (USD 2,087) per month for a wage period. The current monetary cap is HKD 15,300 (USD 1,959).