Sun eases minimum wage fears for firms

Secretary for Labour and Welfare Chris Sun Yuk-han reassured the business sector that the improved minimum wage review mechanism would not adversely affect their competitiveness.

The assurance came after the government recently announced that the minimum wage would be reviewed annually, starting from May 1, 2026, instead of every other year.

Under the new mechanism, a formula taking into account the SAR's GDP and consumer price index will be introduced to calculate the minimum wage level, which will only be frozen at existing levels or rise.

Sun, who visited workers on Labor Day, said the wage policy had been carefully designed to address all factors, including ensuring a reasonable wage for workers and avoiding a decline in low-paid jobs while also making sure the city stays competitive.

"The new mechanism takes into account these same considerations, and therefore, I cannot see how it would negatively impact the business sector or Hong Kong's competitiveness," he said.

"It is essential for society to understand that recipients of the minimum wage are approximately 17,000 grassroots citizens, and the government has a responsibility to protect their livelihoods and income."

Federation of Trade Union chairman Kingsley Wong Kwok - who accompanied Sun - dismissed concerns that the new mechanism would lead to higher joblessness during a recession.

Minimum wage levels in a majority of countries are much higher, he said, but haven't hindered their competitiveness. Hong Kong, sources have said, is raising its minimum wage to HK$41.80 from HK$40.

Also, only a small number of people receive the minimum wage, he added, and thus, the impact on businesses would be minimal.

Catering-industry veteran Simon Wong Ka-wo said the new mechanism would not significantly affect the sector.

An existing manpower shortage in the industry, he said, means restaurants are already paying staff well above the minimum wage.

"We are paying dishwashers up to HK$18,000, and freelancers are earning up to HK$80 per hour," Wong said.

Chief Executive John Lee Ka-chiu expressed his commitment to collaborating with society to establish a reasonable, fair and safe working environment for employees.

Simon Lee Siu-po, honorary fellow at Chinese University's Asia-Pacific Institute of Business, said there is no "perfect formula" for determining the minimum wage level and anticipated that there would be calls to revamp the mechanism in the future.