About 1,000 cleaners protested outside the government headquarters yesterday against a "shameful" decision not to subsidise its cleaning contractors after raising the statutory minimum wage from HK$28 to HK$30.
The cleaners fear the contractors could go bankrupt because of the financial burden and they will lose their jobs.
Protest organiser Catherine Yan Sui-han said that when the initial minimum wage of HK$28 an hour was introduced in May 2011, the government subsidised the extra cost for the contractors.
It meant contractors paying HK$25 an hour were given the extra HK$3 needed to pay their cleaners.
But when the minimum wage went up to HK$30 this May, the government refused any further subsidy.
Yan, convenor of the Environmental Services Contractors Alliance, said that some contractors faced going bankrupt because of the extra costs incurred by the new minimum wage level. "One contractor needed to mortgage his house while others have had to borrow money from the banks," Yan said.
She added it was unfair for the government not to subsidise the wages further because when the cleaning firms signed its contracts, they had not known there would be a minimum wage law.
At present, about 20 contractors with 400 cleaners are affected. The extra cost that each firm is having to cover ranges from HK$60,000 to HK$9 million.
Yan said the government's current ongoing subsidy adds up to about HK$300 million, and only another HK$40 million more was needed until all the firms' contracts had ended and they were able to sign new deals.
If the government insists on not coming up with a further subsidy, Yan said the alliance may besiege Government House, lodge a judicial review or even stage a strike.
Before the minimum wage law became effective in 2011, Secretary for Labour and Welfare Matthew Cheung Kin-chung insisted that the first subsidy was a one-off "special arrangement".
A spokesman for the Financial Services and the Treasury Bureau said yesterday that officials had met representatives from the alliance but added it had already made it clear there would be no second round of subsidies.