Hong Kong Sets Minimum Wage

After much heated debate that lasted 41 hours in the Hong Kong Legislative Council, the Minimum Wage Ordinance ("Ordinance") was passed on 17 July 2010 and will come into force on this year's Labour Day holiday, 1 May 2011. The Ordinance, a rare departure from Hong Kong's free market economy, provides for a statutory minimum wage ("SMW") for employees and aims "to strike a balance between forestalling excessively low wages and minimising the loss of low paid jobs while sustaining Hong Kong's economic growth and competitiveness".

Because of the extensive application of the new SMW system, there is a need for all employers to understand the relevant provisions and the application of the Ordinance regardless of whether you pay employees on an hourly basis or below the SMW.