A workers' union has urged bosses to pay staff stationed over the border in yuan because of the appreciation of the currency. The general secretary of the Confederation of Trade Unions, lawmaker Lee Cheuk-yan, said people working on the mainland were suffering by being paid in Hong Kong dollars. The yuan has risen about 18 per cent against the dollar since it was floated in 2005. 'The purchasing power of the dollar on the mainland is diminishing almost day by day,' Mr Lee said. 'This is actually a form of pay cut for those working and living there.' Aside from the yuan appreciation, inflation has increased the cost of living across the border. The consumer price index rose 8 per cent in the first three months of the year. Mr Lee urged firms to address this problem by paying their workers in yuan. Firms could also deal with the problem by giving pay rises or special allowances. Official statistics show there are about 470,000 Hongkongers living on the mainland, with 290,000 involved in economic activities. Edmond So Wai-chung, general manager of local headhunting company Besteam Personnel Consultancy, said 20 per cent of people seeking jobs across the border asked for payment in yuan. 'I think more job seekers will make this a condition if the yuan keeps going up,' said Mr So, whose company deals with about 300 cross-border job applications a year. But he said most employers had been rather cool to the suggestion. Veteran headhunter Alexa Chow Yee-ping, managing director of Centaline Human Resources Consultants, agreed the yuan was a concern. 'Many companies, especially multinational ones, are reluctant to change to the yuan for salaries,' she said. 'It is partly because they have their own policies and are unlikely to make exemptions for individual staff stationed on the mainland.' But some firms had given a yuan allowance or a pay rise to deal with the problem. Workers on the mainland were not the only ones to suffer, said Stanley Lau Chin-ho, deputy chairman of the Federation of Industries. He said Hong Kong employers had suffered major losses as the yuan appreciated. 'Some enterprises have had to close due to the extra cost brought by the yuan's appreciation,' he said. He urged workers to stick to their contracts. 'If they change to yuan today, will they change back to Hong Kong dollars when the dollar is going strong again?' he asked.