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Following is the transcript (English portion) of the remarks by the Secretary for Labour and Welfare, Mr Matthew Cheung Kin-chung, on the statutory minimum wage (SMW) at a media stand-up today (November 10):
At its meeting yesterday, the Chief Executive-in-Council adopted the recommendation of the Provisional Minimum Wage Commission to set the statutory minimum wage at $28 an hour. The relevant subsidiary legislation will be published in the Gazette this Friday (November 12) and tabled at the Legislative Council next Wednesday (November 17). If everything goes well, the minimum wage will come into force on May 1, 2011, that is the next Labour Day. This not only carries symbolic significance but also gives some six months' lead time for the community to get ready for it.
The Commission has dutifully discharged its duties in accordance with its Terms of Reference and come up with the recommendation for the initial minimum wage rate. I would like to pay warm tribute here to its Chairperson, Ms Teresa Cheng, and all members for their hard and excellent work over the past year or so in fulfilling this historic mission.
The Commission has adopted an evidence-based approach and made reference to relevant statistical data from the Census and Statistics Department, experience of other places in implementing minimum wage, views and empirical data/information provided by stakeholders as well as academic articles. In arriving at the recommended rate, the Commission has fully considered and balanced all factors.
These factors include the latest economic and labour market conditions; the percentage relative to median wage; the number and proportion of employees to be covered under the recommended rate; impact on competitiveness and economic growth, inflation, unemployment rate, individual businesses as well as the community from a social perspective like enhancing the quality of life and social harmony, enhancing work incentive as well as the ratio of employees to be benefitted.
According to the Commission's estimation, the recommended rate of $28 per hour would represent 48% of Hong Kong's median hourly wage in the second quarter of 2009. Around 314,600 or 11.3% of the total number of employees in Hong Kong would be involved. Of the group, 61.4% are female employees, 25.3% are employees aged 55 and above, and 18.8% are part-timers. In terms of sector, 35.5% of the employees come from estate management, security and cleaning services; 19.8% restaurants and 16.4% retail businesses. It is important to note that the average wage increase would be about 16.9%. The total wage bill in Hong Kong is estimated to increase by $3.3 billion or up 0.6%.
The Commission estimates that the impact of the recommended rate on Hong Kong's overall unemployment rate is likely to be relatively mild, particularly when viewed against the improving economic and labour market conditions. The inflationary impact should also be mild.
Before statutory minimum wage comes into force, the Labour Department will launch an extensive public education and promotion campaign on the statutory minimum wage requirements and draw up guidelines with relevant stakeholder groups to address the special characteristics of various sectors. Publicity materials with illustrative examples drawn from different trades and industries to explain the application of the Minimum Wage Ordinance will be formulated to facilitate employers and employees to understand their obligations and responsibilities as well as entitlements, of course.
Statutory minimum wage is a totally new and novel thing to Hong Kong. I appreciate that it will take time for the community, especially employers and employees, to get used to it. It is important for us to always bear in mind that the aim of statutory minimum wage is to protect our grassroot workers and ensure that the pay that they get is commensurate with the hours worked.
Let me also reiterate here that employees are the most valuable asset of an enterprise. It is always in the interest of employers to bear in mind the well-being, morale and sentiment of their employees, treat them well and foster harmonious labour relations.
In the past year, the broad-based economic recovery and progressive improvement in the labour market have provided a relatively stable macro environment for the implementation of minimum wage in Hong Kong. Let us all be practical, fair, and reasonable in realising the spirit of minimum wage and reducing its negative impact to the minimum. Let's work together to protect the rights of our grassroot workers and foster social harmony.
Reporter: Mr Cheung, what would the government do to prevent unscrupulous employers who try to shuffle off their responsibilities by using some loopholes in the law, e.g. unpaid lunch breaks. Would a statutory body be set up to review the level of minimum wage regularly?
Secretary for Labour and Welfare: Now first of all let me deal with the review mechanism. The review mechanism is quite clear that in the Ordinance, it has provided that at least not less than once in two years' time we should review the wage level. So, we got a mechanism here in terms of timing, the time cycle, to review it. And also we will update the Annual Earnings and Hours Survey which was done in 2009 and formed the basis of the evidence-based approach for the Commission. That would be an annual exercise in future, every year. In fact, the next year figure would be coming out next February. It will actually update the position after 2009. So in a way, that gives you a pretty good mechanism on which to conduct a review. So the review, the time cycle in terms of modus operandi is quite clear.
The other question is between now and first of May before implementation, we have got six month's time. I would urge employers in Hong Kong to communicate closely with their employees, particularly have a frank discussion, and work together. And also we will be issuing guidelines for references by both employers and employees. It is coming out shortly. We will be consulting relevant industries, sectors, unions, employer organisations and stakeholder groups. We will soon be coming up with practical guidelines so that they can follow, some best practices they can follow. I hope all these will change the culture and prepare the ground for implementation come first of May next year.
(Please also refer to the Chinese portion of the transcript)
Ends/Wednesday, November 10, 2010
Issued at HKT 20:03
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