Asked Questions about
The Minimum Wage Ordinance, Cap. 608
Computing statutory entitlements
||If an employer hires his employees
at hourly rate, does it mean that he need not pay these employees other statutory
entitlements (e.g. holiday pay, annual leave pay)?
All employees covered by
the Employment Ordinance, irrespective of their hours of work, are entitled to
basic protection under the Ordinance including payment of wages, restrictions
on wages deductions and the granting of statutory holidays, etc.
who are employed under a continuous contract are entitled to additional benefits
such as rest days (Note), holiday pay, paid annual leave, maternity
leave pay, paternity leave pay, sickness allowance, severance payment and long service payment, etc.
An employee who has been employed continuously by the same employer for four weeks
or more, with at least 18 hours worked in each week is regarded as being employed
under a continuous contract.
Hence, regardless of their
wage payment mode (i.e. monthly-rated, weekly-rated, daily-rated, hourly-rated,
piece-rated, commission-based, etc), employers must comply with the Employment
Ordinance in granting statutory entitlements to employees.
: Neither the Minimum Wage Ordinance nor the Employment Ordinance prescribes that rest days should be paid. Whether rest days are with pay or otherwise and the calculation method of rest day pay (including whether rest days are remunerated at the SMW rate) are employment terms in accordance with the employment contract or agreement between employers and employees.
||Should statutory entitlements
such as holiday pay or annual leave pay under the Employment Ordinance be calculated
at not less than the SMW rate?
The major provisions of the Minimum Wage
Ordinance are aligned as closely as possible with those of the Employment Ordinance
to ensure consistency and effective enforcement, avoid confusion to employers
and employees and minimise the compliance cost for employers. Hence, the
Minimum Wage Ordinance does not change the calculation method of statutory entitlements
currently under the Employment Ordinance. For details of the calculation
of these statutory entitlements, please refer to A Concise Guide to the Employment
Ordinance published by the Labour Department.
According to the Minimum Wage Ordinance, if wages payable to the employee in respect of the wage period are less than the minimum wage, he is entitled to be paid the difference (i.e. “additional remuneration”). The contract of employment of the employee must be taken to provide that the employee is entitled to additional remuneration in respect of that wage period.
Since additional remuneration
is part of wages payable to employees under the Employment Ordinance, and statutory
entitlements under the Employment Ordinance (e.g. holiday pay, annual leave pay,
sickness allowance, maternity leave pay, paternity leave pay, severance payment, long service payment,
wages in lieu of notice, etc.) are calculated according to the definition of wages,
the amount of these statutory entitlements should also take into account the additional
remuneration (where applicable).