Hong Kong: The frozen minimum wage

On 2 February 2021, Hong Kong Secretary for Labour and Welfare, Law Chi-kwong, announced that the minimum wage will be frozen at HK$37.50 per hour from May 2021 up till 2023. Since the Minimum Wage Ordinance was enacted in 2011, this is the first time that the minimum wage is frozen. 

This freeze is in response to Hong Kong’s current economic recession and high unemployment rates. On top of that, the Hong Kong government believes that by freezing the minimum wage, it can help to minimise the loss of low paying jobs which threatens to further depress the unemployment rate. 

However, concerns have been raised by the HKFTU’s Rights and Benefits Committee with low-income workers in mind. In fact, the members of the committee have been lobbying for subsidies for the low-income workers to mitigate the impact of the frozen minimum wage on their quality of life. Essentially, they are fighting for the Government to offer subsidies so as to make up for the grassroots’ loss of purchasing power. 

This was however rejected as the chairwoman of the Minimum Wage Commission argued that the previous 8.7% wage increase from 2019 has outpaced inflation thus far and hence, this freeze in minimum wage will not adversely affect the purchasing power of the grassroots. Moreover, Secretary Law said that there are other government welfare policies in place such as the Comprehensive Social Security Assistance which can help this group of people. 

Ultimately, this move in freezing the minimum wage is to strike a balance between forestalling excessively low wages as well as reducing the cuts in low paying jobs. 
If you want to know more HR insights about expanding your business in Hong Kong, feel free to connect with us. Or click here to be redirected to more information about employment regulations in Hong Kong. 

This article is written with reference from:

Chau, C. (2021, May 25). Hong Kong freezes minimum wage amid pandemic woes | HRM Asia. Retrieved June 21, 2021, from HRM Asia website: https://hrmasia.com/hong-kong-freezes-minimum-wage-amid-pandemic-woes/

Cheng, S. (2021, February 4). Freezing Hong Kong minimum wage at HK$37.5 an hour is an “insult” to cleaners at Covid-19 frontlines, labour group says | Hong Kong Free Press HKFP. Retrieved June 21, 2021, from Hong Kong Free Press HKFP website: https://hongkongfp.com/2021/02/04/freezing-hong-kong-minimum-wage-at-hk37-5-an-hour-is-an-insult-to-cleaners-covid-19-frontlines-labour-group-says/

Rthk News. (2021, February 2). Govt freezes minimum wage for the first time – RTHK. Retrieved June 21, 2021, from Rthk.hk website: https://news.rthk.hk/rthk/en/component/k2/1573669-20210202.htm