Hong Kong’s Executive Council approves new mechanism that blocks cuts to minimum wage
Hong Kong’s key decision-making body has approved the introduction of a mechanism to review the per-hour minimum wage which will not allow pay cuts in future, the Post has learned.
A source on Tuesday said the Executive Council also agreed to a proposal to review the minimum wage annually, instead of once every two years, confirming the Post’s earlier report.
The changes made to the review are the first in 13 years since Hong Kong introduced the statutory minimum wage in 2011 to provide protection for low-paid workers.
The new mechanism is expected to take effect next year, when the rate is due for review, instead of this year as earlier predicted by some insiders close to the Minimum Wage Commission.
The review would become an annual exercise in 2026, the source said.
Hong Kong business sector hails minimum wage formula as economist sounds alarm
Hong Kong business sector hails minimum wage formula as economist sounds alarm
Under the mechanism, the formula deciding the wage level each year will include factors such as the consumer price index (A), current gross domestic product growth and average GDP growth in the past 10 years.
If the formula produces a negative number, the minimum wage will not be reduced but frozen.
For example, if the level was reviewed this year, the minimum wage per hour would increase from the current HK$40 to HK$41.80, representing a 4.5 per cent increase.
