[2023 Minimum Wage Increase] What should employers pay attention to?

Starting from May 1, 2023, the minimum wage in Hong Kong will increase from HK$37.5 per hour to HK$40 per hour. Regardless of the industry or whether the employee is full-time or part-time, all employees are protected by the minimum wage legislation. 

Employers are advised to take note of the following points to avoid unintentionally violating the law.

• Regularly review employees’ monthly salary: Firstly, employers and employees must reach a consensus on the calculation of working hours, including arrangements for lunchtime and overtime, and accurately record the hours worked. 

With the minimum wage increase, employers should re-evaluate whether the monthly salary divided by the total working hours (including overtime) meets the minimum wage standard per hour.

• Different employees may have varying salaries and working hours due to differences in job levels. For example, some employees may be scheduled to work 5.5 to 6 days per week, including weekend shifts. 

Additionally, certain job types, such as security guards and janitors, may work more than 8 hours per day and often require substitutes for leave. Employers should pay extra attention to these situations.

Calculation of base salary + commission: Allowances for transportation, meals, or any other employee benefits provided by employers are not considered part of the wages. 

Therefore, for job types that receive “base salary + commission,” such as salespersons, beauty consultants, and massage therapists, special attention should be given. While the base salary may be relatively low, the commission can be substantial, following a “work more, earn more” system. 

Employers must ensure that even if an employee has “no sales” in a month and receives no commission, the base salary still meets the minimum wage requirement. If necessary, employers should negotiate with employees and promptly adjust contracts to avoid violating statutory standards.

Each industry has its own specific business techniques. Seeking advice from an experienced accountant can help navigate the complexities and lead to business growth.

Finding the right people and doing the right things will make everyone an expert.

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