The View | Are standard working hours a good thing for Hong Kong?

Since the adoption of the minimum wage legislation in 2011, organised labour has been pushing for standard working hours legislation. If this becomes law, it will be a severe blow to Hong Kong’s labour market flexibility.

Unlike the minimum wage, which affects only the bottom end of the labour market, standard working hours affect the entire labour market, bringing serious employment distortion and reducing economic efficiency.

This problem is particularly acute in Hong Kong because working hours are widely distributed, making it nearly impossible to legislate uniform working hours without serious economic consequences.

In June 2012, the Labour Department published the highly informative Report on the Policy Study on Standard Working Hours. It confirmed that the dispersion of hours of work per week was very wide and found nearly 85 per cent of the labour force worked more than 40 hours a week.

It also showed that standard working hours legislation could have alarming impacts: employers could face an additional wage bill ranging from HK$8 billion to HK$55.2 billion, and 50.6 per cent to 91.1 per cent of full-time employees could be impacted.

While these findings are useful, they do not explain why working hours are long and widely distributed. Understanding this is critical and relevant to the question of whether there should be standard working hours legislation.