Who is not eligible for the “Minimum Wage Ordinance”? Is it the same as the Employment Ordinance when calculating employee entitlements?

What is the minimum wage in Hong Kong? It is said that a new round of minimum wage reviews will be carried out this year, but do you know the details of the Minimum Wage Ordinance? Who is not eligible for the minimum wage? What are the considerations when calculating the minimum wage? This article will take you through it one by one.

Legal minimum wage – HKD37.5

Effective from 1 May 2019, the Minimum Wage Ordinance states that the statutory minimum wage level in Hong Kong is $37.5 per hour

. An employee’s wages for any wage period shall be calculated based on the total number of hours worked during the wage period and shall not be less than the legal minimum wage.

Does the minimum wage apply?

All Hong Kong employees are subject to the statutory minimum wage, even if they are not employed under a continuous contract. Regardless of whether their remuneration system is fixed monthly salary, daily salary, hourly salary, permanent, temporary, full-time, part-time, or other employees, as well as employees with disabilities, they all benefit from the Minimum Wage Ordinance.

However, certain groups/persons are not covered by the Minimum Wage Ordinance, including the following:

• live-in domestic workers (regardless of the worker’s sex, race, and nationality);

• Nominated student trainees and work experience students who are in exempt student employment;

• Persons to whom the Employment Ordinance does not apply eg seafarers, apprentices, and civil servants.

For employees with disabilities, the Minimum Wage Ordinance provides them with special arrangements, giving them the right to choose to undergo productivity assessment and receive wages according to the assessment results. For details, please refer to the “Concise Guide to the Productivity Assessment of Disabled Employees under the Statutory Minimum Wage System”.

1. How is the minimum wage calculated?

During any wage period, the employer shall calculate the minimum wage as follows:

Minimum wage = the total number of hours worked by the employee during the wage period X legal minimum wage level

Among them, in the calculation of working hours, less than one hour must also be counted, including the employee’s decision in accordance with the employment contract and the employer’s instructions. The time spent staying on duty at the place of employment, regardless of whether they were assigned work or provided training at that time; and the time spent on transportation should also be counted, not including travel between the place of residence and the place of employment.

In addition to the Minimum Wage Ordinance, if according to the employment contract or the agreement between the employer and the employer, the relevant time is regarded as the hours worked by the employee, such time must also be included in the calculation of the minimum wage.

2. The Minimum Wage Ordinance and the Employment Ordinance?

The statutory minimum wage is consistent with the definition of wages in the “Employment Regulations”, which means that the employer pays employees in monetary form for all remuneration, income, allowances (including transportation allowances, attendance allowances, commissions, etc.), overtime pay), tips and service charges, etc.

However, in some cases, it will be listed whether certain payments are wages to be paid to determine whether the wages meet the minimum wage requirements. Once an employee is paid less than the minimum wage, he is entitled to “additional remuneration” for the difference, which also applies to the calculation of payments due under other relevant legislation.

When calculating minimum wages, payments to employees other than hours worked are also not required to be counted as wages, including rest days, holidays, annual leave, maternity leave, paternity leave, sickness allowance, and other remuneration. Similarly, whether meal breaks and rest days are paid or not is a condition of employment, to be agreed upon between the employer and the employee.

The above information is for reference only. If you have any questions about tax declaration and accounting, we welcome your inquiries.