The Minimum Wage Ordinance is effective on 1st May 2011

On 5 January 2011, the Legislative Council has made the final pass on the Minimum Wage Ordinance (“MWO”). The Ordinance is effective on 1 May 2011 and it aimed at providing a statutory minimum wage to all relevant employees based on the prescribed minimum hourly wage rate of HK$28 and the hours which they have worked in the relevant wage period. According to the statistics made by the Hong Kong Government in 2009, about 374,800 employees (mainly consisted of low skilled workers from catering, retail and cleaning industry) would benefit from the ordinance.

Application of the MWO

The MWO applies to every employee and his/her employer except the following person:

-       a person who is engaged under a contract of apprenticeship

-       domestic worker who dwells in the household of the employer free of charge

-       certain student intern (a student undergoing a period of work arranged or endorsed by certain education institution specified by the MWO in connection with an accredited programme provided by the institution for which the work is a compulsory or elective component for the award of the relevant academic qualification)

-       certain work experience student (a student who is enrolled in an accredited programme specified by the MWO or is a resident in Hong Kong who has enrolled in a non-local education programme and is engaged under a contract of employment which is a compulsory or elective component for the award of the relevant academic qualification) (The student must be under 26 years old at the beginning of the employment and the exempted period shall be limited to 59 days).

The MWO is also applicable to an employee under disabilities who holds a valid registration card issued by the Central Registry for Rehabilitation established by the Government (“PWD”). Basically, a PWD may agree with his/her employer concerning his/her wages during a four-week trial period (or until the completion of assessment of productivity, if earlier) at a rate which is not less than 50% of the prescribed minimum wage. After obtaining the relevant certificate of assessment, the hourly wage rate of the PWD shall be calculated with reference to the assessed degree of productivity.

Obligation of the Employers

The MWO stipulates that a provision of a contract of employment that purports to extinguish or reduce any right, benefit or protection conferred on the employee by the MWO is void. All relevant employers must comply with the MWO notwithstanding any agreement with the employee which is contrary to the MWO.

If an employee is protected under the MWO and the wages payable to that employee in any wage period are less than the amount of HK$11,500 prescribed by the MWO, then the wage record (which the employer is obliged to maintain under the Employment Ordinance) must contain information about the total number of hours worked by the employee in the wage period. Such record shall be kept by the employer for a period of 6 months after the employee ceases to be employed.

For detail provision of the ordinance, please refer to the original text posted in “what’s new section” of the Labour Department website. (http://www.labour.gov.hk)