Editorial | Putting Hong Kong’s workers first on this Labour Day
A minimum wage rise and the end of employer rights to claw back contributions from pensions for severance and long service are taking effect
Unlike previously, when May 1 was marked by large-scale demonstrations calling for better protection for workers, Labour Day in more recent years has passed by as a paid holiday for people to take a break.
But this year offers double the reason to celebrate as two key improvements in benefits take effect today.
The hourly minimum wage will rise by HK$2.10 to HK$42.10 (US$5.43). The increase is the first since a new formula for adjustment was passed last year.
The mechanism is linked to the consumer price index and economic growth, which is seen as a better way to ensure low-income workers can share the city’s economic fortunes and guard against erosion of their standard of living caused by inflation.
In another landmark change, employers can no longer claw back contributions from the pension pot to settle severance or long-service payments for workers.
The so-called offsetting mechanism of the Mandatory Provident Fund Scheme is being scrapped starting from today, with the government sharing the payment with a HK$33 billion subsidy scheme during a 25-year transition period.