What is minimum wage?
Minimum wage definition: The minimum wage is the lower limit agreed between the employer and the employee as regulated by the Employment Ordinance.
Minimum wage Hong Kong
The minimum wage in Hong Kong came into effect on May 1st, 2011. From May 1st, 2019, the statutory minimum wage level will be raised to HK$37.5 per hour. At the same time, the cap on the employer’s record of the total number of hours worked by employees has also been revised to HK$$15,300 per month.
The statutory minimum wage is based on hourly wages. The basic principle is that the wages of an employee in any wage period shall be calculated on average based on his total working hours and shall not be lower than the statutory minimum wage.
Why is minimum wage important?
The Minimum Wage Ordinance establishes a Statutory Minimum Wage (SMW) regime aimed at striking an appropriate balance between forestalling excessively low wages and minimising the loss of low-paid jobs while sustaining Hong Kong’s economic growth and competitiveness.
The major provisions of the Minimum Wage Ordinance are aligned as closely as possible with those of the Employment Ordinance to ensure consistency and effective enforcement, avoid confusion to employers and employees and minimise the compliance cost for employers.
Does the minimum wage system work for everyone?
The statutory minimum wage applies to most employees and employees with disabilities, but the Employment Ordinance also specifies that it does not apply to the following persons, including:
- a family member who lives in the same dwelling as the employer;
- an employee as defined in the Contracts for Employment Outside Hong Kong Ordinance;
- a person serving under a crew agreement under the Merchant Shipping (Seafarers) Ordinance, or on board a ship which is not registered in Hong Kong; and
- an apprentice whose contract of apprenticeship has been registered under the Apprenticeship Ordinance, other than certain provisions of the Employment Ordinance.
- live-in domestic workers(This refers to domestic workers (including domestic helpers, carers, chauffeurs, gardeners, boat-boys or other personal helpers) who dwell free of charge in their employing household, irrespective of their sex, race or nationality.)
- specified student interns as well as work experience students during a period of exempt student employment
The core of payroll calculation is “accuracy”, but it is not easy to ensure that basic data records such as employees’ basic payroll information, actual working hours, and leave days are correct. Before payouts, it is even more important to consider whether variable pay items such as commissions or allowances meet the standards, and check whether MPF have been deducted, etc. In order to truly realise “accurate payroll” is more difficult than we imagined.
Workstem has a powerful AI engine to integrate payroll module with onboarding, scheduling, attendance and leave. In addition to automatically calculating and tracking employees’ average daily wages (ADW), MPF deduction and other pay items, the AI formula engine will automatically obtain the corresponding employee data in each module for payroll to further guarantee the accuracy.
After the payroll calculation, the employer can choose any one of HSBC, Hang Seng Bank, Bank of China, Standard Chartered, East Asia, DBS and more Autopay. Through the Workstem One App, employees can check payslips at any time to complete the payroll management in one step.