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Hong Kong economy

Pay Hong Kong bosses the cost of extra month’s maternity leave, former government adviser urges

Professor Francis Lui says added payout would be about HK$800 million a year, or HK$19,000 per female worker, a sum the administration ‘should have no problem settling’

PUBLISHED : Sunday, 09 September, 2018, 8:01pm
UPDATED : Sunday, 09 September, 2018, 11:20pm

An economist and government adviser has said a plan to give women four more weeks of paid maternity leave would cost Hong Kong bosses an extra HK$800 million a year – and called on officials to pay them to make up for it.

Professor Francis Lui Ting-ming, adjunct professor at Hong Kong University of Science and Technology, warned that employers could be discouraged from hiring women if they had to shoulder the added costs.

“From the employers’ viewpoint, better maternity benefits mean higher costs,” Lui said. “They not only need to pay the mothers on leave, but also may have to hire part-timers to fill in, let alone the loss in productivity.”

Based on figures saying about 42,000 working mothers gave birth in 2017 and their average monthly pay was HK$18,000, Lui projected the total extra cost of allowing female workers four more weeks’ maternity leave would be about HK$800 million a year. The cost per employee would be slightly more than HK$19,000 a year.

“This is about 0.03 per cent of Hong Kong’s GDP in 2017. The government should have no problem settling all the extra costs for the employers,” said Lui, who used to be a member of the government-appointed working group on long-term fiscal planning.

Lui weighed in as small business owners were up in arms over the extension plan, saying they had already been pushed to the brink by a series of labour rights proposals under consideration.

The government is studying extending statutory maternity leave from the current 10 weeks to 14, to catch up with the standard of the International Labour Organisation. Secretary for Labour and Welfare Law Chi-kwong has said the government might consider offering bosses subsidies.

Hong Kong General Chamber of Small and Medium Business president Joe Chau Kwok-ming urged the government to take into account the impact of the US-China trade war on Hong Kong’s business environment while considering more labour benefits.

“As the labour minister, Dr Law may tend to pay less attention to the business side,” Chau said. He said the extended maternity leave plan could be the “last straw”.

Government subsidies could offset cost of maternity leave extension

“Four more weeks may not sound a big deal. But it is a 40 per cent increase when compared with the current 10 weeks.”

He said the government should pay bosses for the extra cost of longer leave.

Four more weeks may not sound a big deal. But it is a 40 per cent increase when compared with the current 10 weeks
Joe Chau, Hong Kong General Chamber of Small and Medium Business

Currently, women are entitled to 10 continuous weeks of maternity leave. They can receive four-fifths of their salary during the leave, if they were employed for no less than 40 weeks by the same employer before the start of her leave.

Other new measures in the pipeline include the abolition of the so-called offsetting mechanism of the government-mandated pension scheme, the Mandatory Provident Fund (MPF); standardised working hours and mandatory overtime wages; increasing paternity leave from three days to five; requiring workers and bosses to contribute more to MPF; and the increase in the minimum wage.

Chief Executive Carrie Lam Cheng Yuet-ngor is expected to lay out more of the government’s plans on the issues in her policy address next month.