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Understanding and Complying with Hong Kong's Minimum Wage Laws

If you're planning to start or expand a business in Hong Kong, it's crucial to ensure compliance with labour laws, especially regarding minimum wages.

Hong Kong has a statutory minimum wage established by the Minimum Wage Commission of the Labour Department. This wage is intended to protect the lowest earners while keeping Hong Kong competitive on the global stage.

This article will provide an overview of Hong Kong’s statutory minimum wage, covering its current rate, who it applies to, what counts as wage and work hours, and how to calculate it to ensure compliance.

What Is the Minimum Wage in Hong Kong?

As of 1 May 2023, the statutory minimum wage (SMW) in Hong Kong is set at HKD 40 per hour.

This rate applies uniformly across Hong Kong, with no variation by location. Employers must ensure that when dividing total wages by the number of hours worked, the resulting average meets or exceeds the minimum wage rate.

Unlike in some countries, such as the United Kingdom, the minimum wage in Hong Kong does not vary based on the worker’s age.

The government considers multiple factors when determining the minimum wage rate, including the economic and labour market conditions, social inclusion, and public and stakeholder views.

Who Does the Statutory Minimum Wage Apply To?

Unless otherwise specified, the statutory minimum wage applies to all employees, including those who are:

  • Paid on a monthly, weekly, daily, hourly, or piece-rate basis

  • Working under any type of employment contract, whether permanent, full-time, part-time, day rates, piece-rated, or contracted

Who Is Exempt from the Statutory Minimum Wage?

Some groups are exempt from the statutory minimum wage, including:

  • Live-in Foreign Domestic Helpers: They are entitled to a Minimum Allowable Wage (MAW) of HKD 4,870 per month, along with free food or a food allowance of at least HKD 1,236 per month, rather than the hourly minimum wage.

  • Interns: Students completing internships or work experiences as part of their education are not entitled to the statutory minimum wage, provided they have confirmed “student intern” status under the Minimum Wage Ordinance (Cap. 608).

  • Work Experience Students: Students under 26 years old can be exempt from the minimum wage for up to 59 days of employment per calendar year, provided they meet certain conditions and declare their status.

  • Other Exemptions: These include family members living with the employer, individuals serving under the Merchant Shipping (Seafarers) Ordinance, and registered apprentices under the Apprenticeship Ordinance.

Employees With Disabilities

Employees with disabilities are entitled to the same minimum wage as other workers. However, they have the option to undergo a productivity assessment to determine a suitable wage. This assessment is voluntary and solely at the discretion of the employee.

What Qualifies as Wage?

The following can be considered wages and factored into end-of-year payments and minimum wage calculations:

  • Remuneration, earnings, and allowances (including travel allowances)

  • Tips and service charges

  • Contractual commission and bonuses

  • Overtime pay, if consistently provided or averaging at least 20% of the employee’s monthly wages over the past 12 months

Some items are not considered wages, such as accommodation, education, food, and non-recurrent travel allowances.

Definition of Hours Worked

Hours worked include:

  • Time spent at work, whether performing tasks or undergoing training

  • Job-related travel, excluding daily commuting within Hong Kong

  • On-call or standby time if required by the employment contract

  • Meal breaks if the employee is obligated to remain on duty

How to Calculate the Minimum Wage in Hong Kong

To calculate whether an employee’s wage meets the minimum requirement, multiply the total hours worked by the statutory minimum wage rate.

If an employee’s wage for the period falls below the minimum wage, they have the right to receive the shortfall. It's important to note that non-working periods such as rest days or holidays are excluded from the calculation.

Consequences for Failing to Pay Minimum Wage

Failure to pay the statutory minimum wage is a serious offence, punishable by fines up to HKD 350,000 and imprisonment for up to three years. For domestic helpers, the penalties can include fines up to HKD 150,000 and imprisonment for up to 14 years for underpayment or providing false wage information.


For employers, compliance with minimum wage laws is essential not only to avoid legal penalties but also to foster a fair and equitable workplace that enhances employee satisfaction and retention.


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Woodburn Accountants & Advisors is one of China’s most trusted business setup advisory firms.


Woodburn Accountants & Advisors is specialized in inbound investment to China and Hong Kong. We focus on eliminating the complexities of corporate services and compliance administration. We help clients with services ranging from trademark registration and company incorporation to the full outsourcing solution for accounting, tax, and human resource services. Our advisory services can be tailor-made based on the companies’ objectives, goals and needs which vary depending on the stage they are at on their journey.

 

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