Frequently Asked Questions about
The Minimum Wage Ordinance, Cap. 608
Wage items and wages payable


Q1 :

In determining whether wages meet the minimum wage requirement, which items are included? What are wages payable to an employee?

A1 :

The definition of wages for SMW is aligned closely with that under the Employment Ordinance. Unless otherwise specified in the Employment Ordinance, “wages” means all remuneration, earnings, allowances (including travelling allowances, attendance allowances, commission, overtime pay), tips and service charges, however designated or calculated, capable of being expressed in terms of money, payable to an employee in respect of work done or to be done, subject to certain exclusions(Note). For example, contractual bonus (not of a gratuitous nature or payable at the discretion of the employer) payable to an employee when certain conditions are met (e.g. sales amount) is part of wages. For detailed definition of wages under the Employment Ordinance, please refer to A Concise Guide to the Employment Ordinance published by the Labour Department.

According to the Minimum Wage Ordinance, since the calculation of minimum wage excludes the time that is not hours worked, payment made to the employee for any time that is not hours worked (e.g. rest day pay, holiday pay, annual leave pay, maternity leave pay, paternity leave pay, sickness allowance, etc.) must not be counted as part of the wages payable to the employee in the calculation of minimum wage. The Minimum Wage Ordinance also sets out whether certain sums should be counted as wages payable to an employee in respect of a wage period in specific situations in order to determine whether the wages meet the minimum wage requirement.

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. The additional remuneration also applies in calculating entitlements under other relevant legislation.

Note :
According to the Employment Ordinance, the following items are not wages:
i.
the value of any accommodation, education, food, fuel, water, light or medical care provided by the employer;
ii.
employer’s contribution to any retirement scheme;
iii.
commission, attendance allowance or attendance bonus which is of a gratuitous nature or is payable only at the discretion of the employer;
iv.
non-recurrent travelling allowance or the value of any travelling concession or travelling allowance for actual expenses incurred by the employment;
v.
any sum payable to the employee to defray special expenses incurred by him by the nature of his employment;
vi.
end of year payment, or annual bonus which is of a gratuitous nature or is payable only at the discretion of the employer; and
vii.
gratuity payable on completion or termination of a contract of employment.

 

Q2 :

In determining whether wages meet the minimum wage requirement, is end of year payment included?

A2 :

The definition of wages for SMW is aligned closely with that under the Employment Ordinance.  According to the Employment Ordinance, the definition of wages does not include end of year payment (i.e. any annual payment (including double pay, 13th month payment, end of year bonus, etc.) of a contractual nature, and the contract of employment can be made orally or in writing and can include express or implied terms) and annual bonus which is of a gratuitous nature or is payable only at the discretion of the employer.  Hence, in determining whether wages meet the minimum wage requirement, end of year payment, or annual bonus which is of a gratuitous nature or is payable only at the discretion of the employer, is similarly not included.

 

 

Q3 :

Are rest days of employees paid? Is it required that rest days be remunerated at the SMW rate?

A3 :

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. Where necessary, employers and employees should seek consensus on the concerned employment terms on lawful, sensible and reasonable grounds through labour-management communication and consultation.

According to the Employment Ordinance, employers should not unilaterally vary the employment terms and conditions of employees. The Labour Department stands ready to assist employers and employees to resolve their problems and reach consensus. If employees suspect that their employment rights have been undermined, they could seek help from the Labour Department. The Labour Department will actively follow up such cases.

Note: Employees are entitled to paid statutory holidays and paid annual leave if they meet the relevant requirements of the Employment Ordinance.  For details, please refer to A Concise Guide to the Employment Ordinance published by the Labour Department.