Hong Kong’s low-paid to get contracts guaranteeing overtime pay

Rate will be set at no less than regular wages for those earning up to HK$11,000 a month

PUBLISHED : Tuesday, 13 June, 2017, 7:33pm
UPDATED : Tuesday, 13 June, 2017, 11:50pm

Hong Kong’s leader has left a potential fire for his successor to put out after he leaves office in two weeks’ time, proposing to force employers to sign contracts with low-income employees on overtime work instead of standardising working hours for everyone.

Chief Executive Leung Chun-ying’s offer on Tuesday was immediately spurned by labour unions which accused him of cheating them over an election promise to settle the issue.

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Leung’s cabinet, the Executive Council, on Tuesday passed the proposal to make it mandatory for bosses to pay workers overtime wages at rates no less than their regular salaries only if they make HK$11,000 or less a month.

That would cost employers HK$524 million a year and benefit an estimated 550,000 part-time and full-time workers – accounting for only about 14 per cent of the city’s workforce.

Written contracts would be required and it would be left to both parties to thrash out an acceptable number of working hours. If employees put in extra time above the agreed level, bosses would have to offer overtime pay matching their regular wages.

Leung wants a draft amendment bill ready by the second half of 2018, to be tabled at the Legislative Council, and implemented by the end of 2020 or early 2021.

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The time frame puts the ball squarely in the court of Carrie Lam Cheng Yuet-ngor, who will have a hot potato on her hands when she takes over from Leung on July 1.

Lam’s office refused to comment on Tuesday, though she had promised in her manifesto to “identify a policy direction” over the issue.

Society still has divergent views on this matter
Stephen Sui Wai-keung, labour minister

“Society still has divergent views on this matter,” Secretary for Labour and Welfare Stephen Sui Wai-keung said yesterday. “We understand the expectations of the labour sector. But we don’t want to be standing still.”

In setting the income threshold at HK$11,000, Sui said the government had taken into account the need to help workers while also considering the affordability of companies and the impact on the economy.

Workers in the wholesale industry, import business, and salespeople would benefit the most, he said, promising the government would review the effectiveness of the scheme two years after implementation.

Trade unions were up in arms on Tuesday, complaining of being cheated because while, on the face of it, Leung appeared to have kept his election promise to set up a committee to “examine issues relating to employees’ overtime work conditions and arrangements as well as legislative proposal on standard working hours”, the final proposal was a major letdown.

They have long demanded a standard working week of 40 to 44 hours and an overtime rate of 1.5 times regular wages.

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They pointed out that the monthly income threshold Leung had set ignored the possibility of employees earning more than HK$11,000 working longer hours than those making less.

“This whole proposal is meaningless and shameful,” veteran unionist Lee Cheuk-yan said. “It will not help people achieve better work-life balance, which should be the purpose of any discussions on standard working hours.”

Leung is eager to get the working hours proposal out so he can boast about his achievement
Johnny Lau Yiu-siu, political commentator

Principal government economist Desmond Hou admitted that only 6 per cent of those making HK$11,000 or less had worked overtime without being compensated.

“Leung is eager to get the working hours proposal out so he can boast about his achievement after his term has ended. But by doing so, he is putting Carrie Lam in a difficult position,” political commentator Johnny Lau Yui-siu said.

Yu Mei-wan, a 61-year-old security guard, said 90 per cent of workers like hers had to clock 12 hours a day as stipulated in their contracts. She did not expect Leung’s proposal to make their lives better because employers could manipulate contract terms.

The business sector, on the other hand, welcomed the proposal.

Simon Wong Kit-lung, who operates more than 30 restaurants, said his business would not be affected by the new policy. Almost all of his full-time workers were already making more than HK$11,000 a month.

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“Most big restaurants are already following the practice,” Wong said. “It is good for employers to have contracts, which will help prevent labour disputes.”

According to official data, the median number of working hours per week for Hong Kong men was 45.7 and 44.3 per cent for women in mid-2016.

Additional reporting by Tracy Zhang