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How to undermine your own minimum wage scheme

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Stephen Vines

Just before the Lunar New Year, the government quietly confirmed the existence of the chasm between its much-stated desire to help the least prosperous members of our society and the reality of its indifference. Having declared an intention to protect the underpaid, it decided to punch a hole in the much-vaunted safety net it had erected for that purpose.

That happened after Matthew Cheung Kin-chung, the permanent secretary on labour matters, held a meeting with leading property management companies: he said he understood the difficulties they were having in signing up to the government's voluntary 'wage protection movement'. The firms claimed they were having problems controlling the pay of cleaners and security guards provided by subcontractors to work on their premises.

Mr Cheung, therefore, came up with the bright idea of exempting these companies from responsibility for subcontractors' rates of pay. At a stroke, he hit on a scheme to effectively undermine the entire, so-called voluntary minimum pay scheme designed expressly to protect cleaners and security staff - who constitute the bulk of the lowest paid workforce.

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But even this massive concession did not appear to satisfy the demands of these reluctant companies. Suen Kwok-lam, the president of the Hong Kong Association of Property Management Companies, suggested going further. Instead of his members signing up to the voluntary scheme, he said, it might be better if individual property developments were asked to join it. That would absolve the big companies of responsibility for implementing the scheme, but where they happened to administer properties that comply with minimum pay requirements, they could add their signatures.

By kowtowing to these vested interests, the government sanctions the continued payment of below-average rates to the lowest-paid workers. Such a paper-thin pretext - citing subcontractors' activities - is all the more surprising because, in the government's own contracts with subcontractors, specific provisions enforce adherence to pay levels.

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Why, then, is the government so keen to apply different standards to the private sector? Can it be that its voluntary scheme is rapidly disintegrating into farce as so few companies have signed up? Or is it that special exemptions have to be made for the most powerful companies in Hong Kong? The property managers' association includes subsidiaries of Cheung Kong, Sun Hung Kai Properties and Henderson Land Development, none of whom lack influence in official circles. Or maybe the government simply wants to dodge its pledge to introduce a statutory minimum wage if the voluntary arrangement does not gain adherents.

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