Government must take lead on minimum wage

PUBLISHED : Thursday, 07 April, 2011, 12:00am
UPDATED : Thursday, 07 April, 2011, 12:00am


Laws and regulations are of limited worth unless they are clear and can be easily understood. The minimum-wage legislation that takes effect in little more than three weeks does not obey this simple rule, thereby creating uncertainty and confusion both for employers and many of Hong Kong's worst-off workers. The lack of clarity could mean some workers earning less than they do now. That would defeat the object of the law. The HK$28 an hour agreed on by the Provisional Minimum Wage Commission in consultation with unions and employers' groups is set in stone for at least the next two years. But the lack of direction in the law as to whether meal breaks and days off should be included in calculations allows for a big variation in the lowest permissible monthly salary. Employees now being paid for these may find themselves losing the benefit and end up earning less.

Increasing numbers of companies are asking workers to sign new contracts ahead of May 1, when the law takes effect. Among them are companies that do contract work for the government. Federation of Trade Unions lawmaker Wong Kwok-hing has found after questioning 32 of its 79 departments that half of the employees with outsourced firms were earning less than HK$28 an hour. Just one department knew if its outsourcing agencies paid for leave and meal breaks. That is not good if laws are to be meaningful, followed and enforced.

This law, after all, goes to the heart of one of society's biggest problems, the widening gap between the haves and have-nots. By guaranteeing all workers a fair salary, it aims to alleviate poverty and improve living conditions. The higher wages paid will find their way back into the economy, creating jobs and raising standards. All of Hong Kong benefits. It is an argument that - despite the government's efforts - a fair number in the business community do not buy. Even after 13 years of public discussion, debate, panels and consultation and with the law approved and about to be enacted, some are doing their best to find loopholes. Having had their way for so long thanks to employee protections that are scant compared to other developed economies - a natural offshoot of the city being a bastion for free enterprise - this is to be expected. Finding loopholes is made easier by the law and the government's draft reference guidelines being so difficult to fathom for employers and employees.

The HK$28-an-hour level is not going to be affordable for all employers, especially those that operate on narrow margins. Keeping track of time worked and calculating salaries may involve greater administrative costs. Employees on the margins of the workforce - the elderly, the less educated and the unskilled - are already being squeezed and may find their jobs on the line. Smaller firms will be forced to adapt and some may go out of business.

These are unsettling times for some companies and workers, but a course has been set and we have got to stick to it. Introducing a minimum hourly wage is an important statement that we are determined to improve the circumstances of our worst-paid workers and their families. Decent working hours should be considered next. But for such a process to be effective, it has to have strong, unwavering leadership. The government has had the fortitude and resolve to get the wage law approved. Now it should make the implications of the law clear. And, as Hong Kong's biggest employer, the government should set an example by ensuring that all people who work for it are paid at least HK$28 an hour, meal breaks and time off included.