What is ADW(Average Daily Wage)?
The average daily wage HK is designed to protect employees of wage fluctuation by calculating wages earned over a period of 12 months.
Upon commencement of the E(A)O 2007, regardless of whether an employee is monthly, daily or piece rated, his relevant statutory entitlements shall be calculated on the basis of his 12-month average wages; and in computing his average wages, any periods and wages that fall under the “disregarding provisions” shall be excluded.
Average daily wage calculation Hong Kong
Which pay items should be calculated by ADW?
According to the hk labour law, these salary types below are calculated based on the average daily wage:
- Holiday pay
- Annual leave pay
- Sickness allowance and related provisions*
- Maternity leave pay and related provisions**
- Paternity leave pay
- End of year payment
- Payment in lieu of notice
- Further sum for non-compliance of an order of reinstatement or re-engagement for unreasonable and unlawful dismissal***
*Including the compensation payable by an employer for wrongfully dismissing an employee on sick leave.
**Including the compensation payable by an employer for wrongfully dismissing a pregnant employee.
***If the employer eventually does not reinstate or re-engage the employee as required by the order, the employer shall pay to the employee a further sum, amounting to three times the employee’s average monthly wages and subject to a ceiling of $72,500, on top of the monetary remedies payable to the employee as ordered by the Labour Tribunal.
Note on ADW calculation
The relevant statutory entitlements shall be calculated on the basis of the average daily (or monthly) wages earned by an employee in the 12-month period preceding the specified dates as stipulated by the E(A)O 2007. If an employee is employed for less than 12 months, the calculation shall be based on the shorter period.
The specified dates of the relevant statutory entitlements are:
| Statutory Entitlements | Day(s) of Leave | Specified Dates |
| Holiday Pay | 1 day | Day of the statutory holiday |
| More than 1
consecutive day |
First day of the statutory
holidays |
|
| Annual Leave Pay | 1 day | Day of the annual leave |
| More than 1 consecutive
day |
First day of the annual leave | |
| Day(s) of untaken leave
upon termination of contract |
Date of termination of contract | |
| Sickness
Allowance |
1 day | The sickness day |
| More than 1 consecutive day | The first sickness day | |
| Maternity Leave Pay | More than 1 consecutive day | First day of the maternity leave |
| Paternity Leave Pay | 1 day | Day of the paternity leave |
| More than 1 consecutive day | First day of the paternity leave | |
| End of Year Payment | – | Due day of the payment |
| Payment in lieu of Notice | – | The day when a notice of termination of contract is given (in case a notice has not been given, the day when the contract is terminated) |
| Further Sum | – | Date of termination of contract |
Read more: How to Calculate ADW for Daily-rated Employees？
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