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Hong Kong's new statutory minimum wage rate of HK$40 per hour takes effect

Hong Kong's new statutory minimum wage rate of HK$40 per hour takes effect

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The monthly monetary cap on the requirement of employers recording the total number of hours worked by employees has also been raised to HK$16,300.

Effective 1 May 2023, Hong Kong's statutory minimum wage (SMW) rate has been raised from HK$37.5 per hour to HK$40 per hour. According to the Minimum Wage Ordinance (MWO), all employees are protected by the SMW.


Here are some frequently asked questions on Hong Kong's statutory minimum wage:

Q: What is the coverage of Statutory Minimum Wage (SMW)?

SMW applies to all employees, whether they are monthly-rated, weekly-rated, daily-rated, hourly-rated, piece-rated, permanent, casual, full-time, part-time or other employees, and regardless of whether they are employed under a continuous contract as defined in the Employment Ordinance (EO), with the following exceptions:

By virtue of the coverage to all employees under the EO, the SMW applies to both locals and foreigners working in Hong Kong.

As for the last bullet point, on persons to whom the EO does not apply, they are the following:

  • 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.

The SMW also protects employees with disabilities. They can opt for a productivity assessment to determine whether they should be remunerated at no less than the SMW or at a rate commensurate with their productivity. For those employees with disabilities who have chosen this special arrangement, their employers have to pay wages of not less than the amount to be calculated according to the new SMW rate and the degree of productivity assessed.

Q: How is minimum wage computed?

Minimum wage = Total number of hours worked by the employee in the wage period × SMW rate (i.e. HK$40 per hour with effect from 1 May 2023)

The basic principle is that wages payable to an employee in respect of any wage period, when averaged over the total number of hours worked in the wage period, should be no less than the SMW rate.

Any provision of a contract of employment that purports to extinguish or reduce any right, benefit or protection conferred on the employee by the MWO shall be void. In other words, an employer and an employee cannot by agreement reduce the employee’s entitlement to SMW.

Q: What should be counted as 'hours worked' for computing the minimum wage?

According to the MWO, for the purpose of computing the minimum wage, hours worked (including any part of an hour) include any time when the employee is, in accordance with the contract of employment or with the agreement or at the direction of the employer:

  • in attendance at a place of employment, irrespective of whether he is provided with work or training at that time,
  • travelling in connection with his employment, excluding travelling (in either direction) between his place of residence and his place of employment (other than a place of employment that is outside Hong Kong and is not his usual place of employment),
  • if the time in question is regarded as hours worked by the employee under the employment contract or agreement with the employer, such time should be included in computing the minimum wage.

The MWO does not require that any part of an hour be rounded up to one whole hour in counting hours worked for computing the minimum wage. The Ordinance only provides that any part of an hour should be included in the hours worked for the SMW computation. Therefore, if the hour worked is less than one whole hour, the minimum wage should be computed based on the actual period of time worked.

Q: In determining whether wages meet the minimum wage requirement, which items are included?

The definition of wages for SMW is aligned closely with that under the EO. Unless otherwise specified in the EO, “wages” means all remuneration, earnings, allowances (including travelling allowances, attendance allowances, commission, overtime pay), tips and service charges, however designated or calculated, capable of being expressed in terms of money, payable to an employee in respect of work done or to be done, but not include end of year payment (i.e. any annual payment (including double pay, 13th month payment, end of year bonus, etc.) of a contractual nature, and the contract of employment can be made orally or in writing and can include express or implied terms) and annual bonus which is of a gratuitous nature or is payable only at the discretion of the employer.

In terms of commission, commission payable under the contract of employment is counted as wages payable in respect of the wage period as specified in the employment contract. For the purpose of computing the minimum wage, any commission paid (i) with the prior agreement of the employee (ii) at any time after the first seven (7) days of a wage period but before the end of the seventh (7th) day immediately after that wage period, must be counted as part of the wages payable in respect of that wage period irrespective of when the work is done or the commission is otherwise payable under the contract of employment. Hence, in determining whether the wages of an employee meet the minimum wage requirement, commission can be counted as part of the wages payable in respect of a wage period according to the timing when the commission is paid.

According to the MWO, since the calculation of minimum wage excludes the time that is not hours worked, payment made to the employee for any time that is not hours worked (e.g. rest day pay, holiday pay, annual leave pay, maternity leave pay, paternity leave pay, sickness allowance, etc.) must not be counted as part of the wages payable to the employee in the calculation of minimum wage. 

Q: Is there any specified format for the record of the total number of hours worked?

The monthly monetary cap on the requirement of employers recording the total number of hours worked by employees under the EO has been raised from HK$15,300 to HK$16,300. When wages payable in respect of a wage period are less than HK$16,300 per month, the employer is required to keep a record of the total number of hours worked by the employee in that wage period.

Neither the EO nor the MWO specifies the ways for employers to record the hours worked by employees. Employers and employees can draw up reasonable and practicable ways to record hours worked with regard to their trade characteristics, administrative measures, and monitoring needs in individual establishments, nature of work of the employees, etc.

Employers and employees should keep proper records in relation to attendance, hours worked, wages, etc. to safeguard their respective rights and benefits and help avoid unnecessary disputes.

More details here about Hong Kong's Statutory Minimum Wage.


Responding to the rise in the SMW rate, Bill Lee, Managing Director of JobsDB Hong Kong, believes this decision will undoubtedly address one of the key concerns of employees in Hong Kong.

"We have observed that Hong Kong job market dynamics have become increasingly active recently, with a significant increase in job openings for frontline and low-skilled roles. With the SMW on the rise, these jobs will become even more attractive, potentially easing the structural imbalance problem and having a positive impact on the labour market in Hong Kong," he said.

According to JobsDB, the job advertisements for frontline service sector positions increased by 47% year-over-year in the first quarter of 2023.

He continues: "In the meantime, we advise employers to adopt a more open attitude towards regularly reviewing and adjusting employee salaries to retain talent."


ALSO READ: Amendments to occupational safety and health laws come into effect in Hong Kong


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