The Hong Kong SAR Government implemented the Statutory Minimum Wage (SMW) on May 1, 2011, establishing a wage floor for the labor market to protect grassroots employees against excessively low wages and maintain the economic growth and competitiveness of Hong Kong. The SMW is expressed as an hourly rate. In essence, 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. As of May 1, 2023, the statutory minimum wage has been raised to HK$40 per hour.
Coverage of the Ordinance
SMW applies to all employees, whether they are monthly-rated, daily-rated, hourly-rated, permanent, casual, full-time, part-time or other employees, and regardless of whether or not they are employed under a continuous contract as defined in the Employment Ordinance, with the following exceptions :
persons to whom the Employment Ordinance does not apply:
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;
an apprentice whose contract of apprenticeship has been registered under the Apprenticeship Ordinance. (while certain provisions of the Employment Ordinance apply to registered apprentices, SMW is not applicable.)
live-in domestic workers, irrespective of their sex, race or nationality
specified student interns as well as work experience students during a period of exempt student employment
The History of Statutory Minimum Wage in Hong Kong
How to Calculate?
How to comply with Statutory Minimum Wage?
When handling payroll, HR have to pay attention to the latest labour laws and ensure the calculations are complied with the statutory requirements. However, such a process not only requires consolidating and managing a huge amount of payroll-related data, such as leave and attendance records, but also applying complicated calculation formulas. This is particularly challenging in industries that employ a significant number of full-time and part-time workers, as they often require substantial manpower, resources and time to process payroll. This increases the risk of late payments or calculation errors, which can lead to legal violations and labor disputes.
BridgeBuilder HRMS offers a comprehensive payroll management module and provides professional payroll outsourcing services, assisting you in handling all payroll-related matters effortlessly for enhancing HR efficiency and reducing labor costs . The system is regularly updated to ensure compliance with labor laws, including SMW. Additionally, BridgeBuilder HRMS provides a wide range of essential and advanced modules such as employee profile management, payroll management, time & attendance, roster planning, expense claims, overtime claims, recruitment onboarding and performance appraisal. The platform also features an employee self-service (ESS) web portal and a ESS mobile app to help alleviate HR workload while enhancing employee experience, allowing businesses to refocus on their core business and growth.
Offence and Consequences
Failure to pay minimum wage amounts to a breach of wage provisions under the Employment Ordinance. According to the Employment Ordinance, an employer who wilfully and without reasonable excuse fails to pay wages to an employee when it becomes due is liable to prosecution and, upon conviction, to a fine of $350,000 and to imprisonment for three years. For details regarding SMW, please refer to the official website of the Labour Department: https://www.labour.gov.hk/eng/public/content2_smw.htm
If you are interested in learning more about the features of BridgeBuilder HRMS or would like to schedule a free system consultation with our consultants, please feel free to contact us.
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