Firms face inflated minimum wage bill
Quinton Chan and Peter So
Hong Kong's minimum wage law could cost employers a lot more than expected - up to HK$8,000 a month - because rules for implementing it don't make clear whether meal breaks and rest days should be included in pay calculations.
Under existing labour law, workers should enjoy one rest day a week. However, whether this is paid time off depends on individual employment contracts.
Draft guidelines for implementing Hong Kong's first minimum wage law for monthly-paid workers - which takes effect on May 1 at HK$28 an hour - do not clearly state that meal breaks and rest days should be included in the wage formula. But it lists these two factors in some examples of wage calculations.
The Hospital Authority calculates that it may be required to pay much more than anticipated in monthly salaries - when annual leave is added in with meal breaks and rest days.
'We thought HK$6,200 would be fine,' a person close to the Hospital Authority said, 'but the accountants came back and said the figure would be HK$7,900. 'It's because the rules have changed. When the government launched the voluntary minimum wage movement several years ago, meal breaks and days off were not counted. Now we have to put that into the calculation.'
A senior government official said it would be difficult to make things clearer.
'How can we force people to be paid for rest days and meal breaks?' the official said.
A spokeswoman for the Labour Department said the monthly wage level would be fixed according to individual contracts. She said a final version of the guidelines would be released this month.
A senior member of the General Chamber of Commerce said some utilities firms had found contractors would have to pay their staff nearly HK$8,000 a month.
'A lot of firms will have to include the paid meal breaks and rest days in the wage calculation in order to follow the best possible practice, since their reputation is at stake,' he said. 'This figure is completely beyond our expectations.'
The chamber has urged the government to exclude those factors from the wage calculation, saying most employers were not currently required to pay for them.
In the catering industry, salaries would rise to more than HK$8,000 a month from HK$6,000 because staff normally worked more than 10 hours a day, said Simon Wong Ka-wo, president of the Hong Kong Federation of Restaurants and Related Trades.
The lawmaker for the catering sector, Tommy Cheung Yu-yan, said employers would inevitably hire more casual workers to avoid the extra wage payments.