The Minimum Wage Commission (the “Commission”) held a public consultation inviting views on the current statutory minimum wage (“SMW”) rate. The consultation closed on 28 May 2012. The Commission must submit a recommendation to the Chief Executive in Council on the SMW rate by the end of October 2012.

Employers panic

The Commission had to issue a statement to deal with media reports that it had recommended that the SMW rate be increased to a level ranging from HK$29 to HK$35. The Commission clarified that it had listed these different SMW rates on its website to provide information on their potential impact for public reference.

The Commission confirmed that the SMW level of HK$35 was the highest rate proposed by labour unions at consultation meetings last year and, therefore, it conducted estimations at SMW test levels ranging from $29 to $35. The Commission has emphasised that at this point it does not have any stance on whether the SMW rate should be maintained or adjusted.

Factors to be taken into account

The Commission confirmed that it will take an evidence-based approach taking a range of factors into account including the following:

  • the post-SMW implementation wage distribution data by the Census and Statistics Department;
  • impact assessment based on wage distribution data and findings of other surveys and studies;
  • extensive consultation to capture the views and concerns of the community and various sectors of society on the SMW rate.

The Commission has highlighted that it must consider the need to maintain an appropriate balance between the objectives of forestalling excessively low wages and minimising the loss of low-paid jobs, as well as the need to sustain Hong Kong’s economic growth and competitiveness.