Understanding the Minimum Wage Ordinance in Hong Kong
The Minimum Wage Ordinance (Cap. 608) sets a statutory hourly floor for most Hong Kong employees. This guide covers the current rate, who is exempt, how the rate is reviewed, and the penalties for underpayment.
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Understanding the Minimum Wage Ordinance in Hong Kong
The Minimum Wage Ordinance (Cap. 608) establishes a statutory minimum hourly wage rate for employees in Hong Kong. As of 1 May 2023, the statutory minimum wage rate is HKD 40 per hour. It applies to all employees covered by the Employment Ordinance (Cap. 57), with a defined set of exemptions set out in the Ordinance itself.
What Is the Statutory Minimum Wage Rate?
The statutory minimum wage rate is HKD 40 per hour, effective from 1 May 2023. This figure is set by the Chief Executive in Council by notice published in the Gazette, following a recommendation from the Minimum Wage Commission. The rate is not fixed permanently — it is reviewed periodically.
Under section 9(1) of the Minimum Wage Ordinance (Cap. 608), "the Chief Executive in Council may, by notice published in the Gazette, amend the prescribed minimum hourly wage rate."
The rate applies to the hourly wage. For employees paid on other bases (daily, monthly, piece-rate), employers must ensure the total remuneration divided by total hours worked does not fall below HKD 40 per hour. This is the "minimum wage floor" calculation.
How the Rate Is Reviewed
The Minimum Wage Commission, a statutory body established under the Ordinance, reviews the rate and submits recommendations to the Chief Executive in Council. The review considers:
- The overall economic situation and labour market conditions
- The competitiveness of Hong Kong's economy
- The cost of living and inflation
- The impact on low-income workers and SMEs
The Commission's review cycle is not fixed to an annual schedule; the Chief Executive in Council determines when a review is triggered. Check the latest guidance from the Labour Department for the current rate and any announced changes.
Ongoing Compliance Execution
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Who Is Covered by the Minimum Wage Ordinance?
The Ordinance covers all employees who are employed under a contract of employment and are covered by the Employment Ordinance (Cap. 57). This includes full-time, part-time, casual, and temporary employees, regardless of whether they are paid hourly, daily, or monthly.
However, the Ordinance does not apply to the following categories of workers:
| Category | Exemption Basis |
|---|---|
| Live-in domestic workers | Excluded under section 7(2) of Cap. 608 |
| Student interns | Excluded under section 7(3) of Cap. 608 |
| Work experience students | Excluded under section 7(4) of Cap. 608 |
| Employees not covered by the Employment Ordinance | e.g., certain family members working in a family business |
Eligibility: Who Qualifies?
Any person employed under a contract of employment in Hong Kong qualifies for the statutory minimum wage, provided they are not in an exempt category. There is no age threshold — the Ordinance applies to employees of all ages, including those under 18, as long as they are engaged under a contract of employment.
Non-residents working in Hong Kong on a valid employment visa are also covered, provided their employment is governed by Hong Kong law.
Suitability: Who Is This For vs Not For?
This Ordinance is relevant to:
- Employers with any employee earning below HKD 40 per hour on an hourly basis
- Employees who suspect their wages fall below the statutory floor
- SMEs in retail, food and beverage, cleaning, and security sectors, where hourly-paid roles are common
It is not relevant to:
- Employers of live-in domestic helpers (covered by separate contractual and immigration rules)
- Businesses engaging only independent contractors (who are not employees under the Employment Ordinance)
- Companies with no employees in Hong Kong
How Is the Minimum Wage Calculated for Different Pay Structures?
For employees paid on a monthly or daily basis, the employer must calculate the "average hourly wage" and ensure it is at least HKD 40. The calculation excludes certain payments, such as:
- Overtime pay
- Bonuses and commissions (unless they form part of the basic wage)
- Allowances for special conditions
- End-of-year payments
The Labour Department provides a formula for calculating the minimum wage for employees paid on a non-hourly basis. The basic formula is:
Total wages for the wage period ÷ Total hours worked in the wage period ≥ HKD 40
If the result is below HKD 40, the employer must top up the difference.
Example Calculation
An employee works 200 hours in a month and is paid HKD 7,500 per month.
- HKD 7,500 ÷ 200 hours = HKD 37.50 per hour
- Shortfall: HKD 40 − HKD 37.50 = HKD 2.50 per hour
- Top-up required: HKD 2.50 × 200 hours = HKD 500
The employer must pay an additional HKD 500 for that wage period.
What Are the Record-Keeping Requirements?
Employers must keep wage and hour records for each employee. Under the Employment Ordinance (Cap. 57), employers must retain records of:
- Wage payments
- Hours worked
- Employment terms
These records must be kept for 12 months after the end of the wage period. Failure to keep records is an offence.
The Labour Department has issued a "Guide on Statutory Minimum Wage" and a "Sample Record of Hours Worked" to help employers comply. These are available from the Labour Department's website.
What Are the Penalties for Non-Compliance?
An employer who fails to pay the statutory minimum wage commits an offence. The penalties are:
- A fine of HKD 350,000
- An imprisonment term of up to 3 years
Additionally, the employer must pay the shortfall to the employee. The Labour Department can prosecute, and the employee can also pursue a civil claim through the Labour Tribunal.
Under section 23(1) of the Minimum Wage Ordinance (Cap. 608), "an employer who fails to pay an employee the minimum wage commits an offence and is liable on conviction to a fine of $350,000 and to imprisonment for 3 years."
Enforcement and Complaints
Employees who believe they have been underpaid can:
- Contact the Labour Department's Minimum Wage Complaint Hotline
- File a complaint with the Labour Tribunal
- Seek assistance from a trade union
The Labour Department conducts inspections and investigates complaints. Employers found in breach may be required to pay arrears and may face prosecution.
How Does the Minimum Wage Interact with Other Employment Rights?
The statutory minimum wage does not replace other employment rights. It is a floor, not a ceiling. Employers must still comply with:
- The Employment Ordinance (Cap. 57) — rest days, statutory holidays, annual leave, sick leave, severance payment, long service payment
- The Employees' Compensation Ordinance (Cap. 282) — work injury compensation
- The Mandatory Provident Fund Schemes Ordinance (Cap. 485) — MPF contributions
Minimum wage payments are not a substitute for these entitlements. For example, an employer cannot offset MPF contributions against the minimum wage.
Frequently Asked Questions
Q: What is the current statutory minimum wage in Hong Kong? A: HKD 40 per hour, effective from 1 May 2023. Check the Labour Department for any announced changes. Q: Does the minimum wage apply to part-time workers? A: Yes. Part-time employees are covered by the Employment Ordinance and therefore entitled to the statutory minimum wage. Q: Are live-in domestic helpers covered? A: No. Live-in domestic workers are excluded under section 7(2) of the Minimum Wage Ordinance (Cap. 608). Q: Can an employer deduct wages to meet the minimum wage? A: No. Deductions for things like meals or accommodation are subject to strict rules under the Employment Ordinance. Employers cannot use deductions to bring wages below the statutory minimum. Q: What should I do if I am paid below the minimum wage? A: Contact the Labour Department's Minimum Wage Complaint Hotline or file a claim with the Labour Tribunal. You may also seek assistance from a trade union.
Summary of Key Figures
| Item | Figure |
|---|---|
| Statutory minimum wage rate | HKD 40 per hour |
| Effective date of current rate | 1 May 2023 |
| Maximum fine for non-compliance | HKD 350,000 |
| Maximum imprisonment | 3 years |
| Record-keeping period | 12 months |
Compliance Checklist for Employers
- Identify covered employees: Determine which employees are covered by the Employment Ordinance and not in an exempt category.
- Calculate hourly wages: For non-hourly paid employees, calculate the average hourly wage for each wage period.
- Top up if necessary: If the average hourly wage is below HKD 40, pay the difference.
- Keep records: Maintain wage and hour records for at least 12 months.
- Review regularly: Check the Labour Department's website for any changes to the statutory rate. -> Use the HSIC Code Finder at /hsic-finder to look up your specific code.
This guide is part of HK Company Guide's free resource library for Hong Kong entrepreneurs. Use the HSIC Code Finder to look up your specific code.
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