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HK Min. Wage Review Changed to Annual Review
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The Chief Executive (CE) in Council has accepted the recommendations of the Minimum Wage Commission (MWC) on enhancing the review mechanism of the Statutory Minimum Wage (SMW). The recommendations include reviewing the SMW rate once a year (Annual Review), adopting a formula for implementing the Annual Review and reviewing the aforesaid new review mechanism five to 10 years after its implementation. After extensive consultations and making reference to experience in reviewing the SMW rate, the MWC recommended implementing the Annual Review, which would allow closer alignment of the SMW rate with socio-economic changes and safeguard the income of grassroots employees more effectively. The formula proposed by the MWC comprises two indicators, namely inflation and the Economic Growth factor. The former ensures that the rate of adjustment in the SMW will not fall below the headline Consumer Price Index (A) inflation, so as to maintain the purchasing power of the SMW and safeguard the employment income of grassroots employees. The Economic Growth factor enables the rate of increase in the SMW to be suitably higher than inflation when the Hong Kong economy performs well. The first SMW rate derived under the new review mechanism will take effect on May 1, 2026. The Government will thrash out the arrangements for implementing the new review mechanism and announce them in due course. AAStocks Financial News |
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