Domestic helpers who sign contracts from today will get an additional HK$90 a month after a government decision that upset the workers but pleased their employers.
The new monthly minimum wage is HK$4,010 and helpers whose bosses do not provide food will have their monthly allowance raised by HK$45 to HK$920 a month.
Helpers' unions said that after reductions and freezes during recent tough economic times, the new wage was only HK$150 a month above the 1998 level.
Eman Villanueva, spokesman for the Asian Migrants' Co-ordinating Body, was "very disappointed and angered" by the 2.3 per cent increase and said the supply of helpers would become even more restricted.
He said he made it clear to the Labour Department at a recent meeting that monthly minimum pay should rise to HK$4,500.
But Joseph Law Kwan-din, chairman of the Hong Kong Employers of Overseas Domestic Helpers Association, said the government had taken employers' ability to pay into consideration.
He said Hong Kong should still be able to recruit a sufficient number of helpers because of poorer employment conditions in places such as Taiwan, where helpers are given fewer public holidays off.
A government spokesman said the increase was set "after careful consideration of the economic indicators".
He said it was also necessary to strike a balance between what employers could afford and the livelihoods of the helpers.
Helen Bulusan, who has been working in the city for 11 years, said she was very disappointed.
She said some helpers needed to spend HK$1,200 a month on food because employers offered only simple meals such as bread.
Along with other expenses such as phone bills, many helpers had only HK$2,500 left at the end of the month.
Villanueva said a bigger pay rise was justified because of high inflation. He said the wage level had not risen sufficiently over the years and pointed out it was HK$3,860 in 1998.
"I think the shortage [of helpers] will worsen because the wage is not attractive," he said.
"In Canada, the minimum wage for foreign domestic helpers is the same as for the locals.
"New York and California have also approved a bill of rights to give the same minimum wage level to locals and to foreign domestic workers."
The minimum wage in Canada differs among provinces, but it is about C$10 (HK$75) an hour.
The minimum monthly wages for helpers in Taiwan and Singapore are about HK$4,100 and HK$3,000 respectively.
There are more than 300,000 foreign helpers in Hong Kong at present, mainly from the Philippines and Indonesia.
As the governments in Manila and Jakarta are planning policies to discourage their citizens from working as helpers overseas, agencies are looking to Bangladesh for new recruits.
There are currently about 100 Bangladeshi helpers in the city.
Technic Employment Service Centre chief Teresa Liu Tsui-lan said Hongkongers were once able to choose helpers from several candidates, but now had to take those offered by agencies.