LCQ12: Impact of statutory minimum wage on the subsidised residential care services for the elderly

     Following is a question by the Hon Pan Pey-chyou and a written reply by the Secretary for Labour and Welfare, Mr Matthew Cheung Kin-chung, in the Legislative Council today (May 4):


     At present, the Government has sought to shorten the waiting time for subsidised places in residential care homes for the elderly ("RCHEs") through implementing the Enhanced Bought Place Scheme ("EBPS") and contract RCHEs. In this connection, will the Government inform this Council:

(a) of the respective numbers of RCHEs under EBPS (broken down by EA1 and EA2 categories) and contract RCHEs in the past three years; the numbers of subsidised places provided by each of these types of RCHEs, as well as the average annual amounts of government subsidies provided for each place; the criteria for determining the level of subsidies;

(b) whether the Social Welfare Department knows the respective wage levels of all health workers, care workers and ancillary workers employed in the aforesaid RCHEs; if it knows, of the current maximum and minimum hourly wages for these positions; if it does not know, the reasons for that, as well as whether the authorities will consider collecting relevant information;

(c) whether, in response to the implementation of the Minimum Wage Ordinance (Cap.608)("the Ordinance"), the authorities will consider disbursing an additional one-off grant to the aforesaid RCHEs to alleviate the pressure on their operation; if they will, of the details; if not, the reasons for that; and

(d) whether the authorities have any new monitoring measures to ensure that RCHEs have sufficient manpower and the wage levels of their staff comply with the requirements under the Ordinance; if they have, of the details; if not, the reasons for that?


     My reply to the Hon Pan Pey-chyou's question is as follows:

(a) The number of private residential care homes for the elderly (RCHEs) participating in the Enhanced Bought Place Scheme (EBPS) and that of government contract RCHEs, as well as the number of subsidised places provided by these RCHEs in the past three years are at Annex.

     Under EBPS, the Government purchases care-and-attention (C&A) places from qualified private RCHEs, and sets the purchase prices for these places. The price is made up of two components: government subsidy and the fee payable by the residents. In calculating the amount of government subsidies, the Social Welfare Department (SWD) has already taken into account the operating expenditure of RCHEs in providing such places, including items such as emoluments and rentals. Regarding contract RCHEs, the Government will select suitable operators through competitive bidding after the construction of the RCHE premises. In determining the service fee of contract RCHEs, SWD has also considered their operating expenditure (including emoluments). SWD will review and adjust the amount of EBPS subsidies and service fee of contract RCHEs annually according to the established mechanism.

(b) Operators of private RCHEs participating in EBPS and contract RCHEs should sign employment contracts with their employees, setting out the mutually agreed employment terms, and comply with all laws and regulations relating to the employment of staff, including the Minimum Wage Ordinance (MWO). As the salary level is an employment term agreed between the RCHE operators as employers and their employees, SWD does not have the information in this respect.

(c) SWD has all along maintained communication with the sector to keep abreast of their latest business situation. SWD has recently met with the representatives of RCHEs participating in EBPS. Attendees have also mentioned the implementation of statutory minimum wage and its impact on RCHEs.  

     SWD is exploring possible support measures for EBPS homes, and will set up a working group inviting representatives from the sector and professionals to join and discuss how to further enhance EBPS.

(d) At present, all RCHEs in Hong Kong have to comply with the minimum staffing requirement under the Residential Care Homes (Elderly Persons) Ordinance and its subsidiary legislation. The Licensing Office of Residential Care Homes for the Elderly (LORCHE) of SWD conducts inspections on RCHEs to ensure compliance of the licensing requirements. If irregularities (eg understaffing) are detected during the inspections, LORCHE will require the RCHEs concerned to rectify the situation. It will issue advisory or warning letters to non-compliant RCHEs, or even initiate prosecution actions.

     If RCHEs are suspected to have violated MWO, LORCHE will refer the cases to the Labour Department (LD) for follow-up. Besides, LD will proactively inspect the workplaces of various trades and take targeted enforcement action for low-paying sectors (including RCHEs) with a view to safeguarding employees' statutory benefits. During the inspections, labour inspectors will explain to employers and employees the requirements of MWO. Should irregularities be detected, LD will require the employers to take appropriate measures to comply with MWO, including making payment to employees of any wages falling short of the statutory minimum wage. LD will also enhance the publicity of the relevant complaint hotline (2815 2200) to encourage employees to report suspected breaches. LD will follow up and investigate all complaints received, and take strict enforcement action against wilful breaches of the law. If RCHE staff have any questions on statutory minimum wage, they can make enquiries through LD's 24-hour hotline (2717 1771), or obtain more information at the district offices of LD's Labour Relations Branch.

Ends/Wednesday, May 4, 2011
Issued at HKT 11:57