Source: South China Morning Post
Employers will need to pay out up to HK$55.2 billion more a year in wages if standard
working hours are introduced in Hong Kong, a long-awaited government report says.
The report, of a study carried out by the Labour Department last year and finished earlier
this year, also suggests that such a law, together with a statutory minimum wage, would
significantly weaken the flexibility of firms to ad ust and rebound during difficult times.
“There will be a huge impact particularly to small- and medium-sized enterprises. This is
because there are still underlying worries as far as economic prospects are concerned,”
Secretary for Labour and Welfare Matthew Cheung Kin-chung said.
But he added that the government did not have a preconceived stance on the matter and it
was important to have consensus in society on whether standard hours should be
introduced.
The department generated 27 scenarios of the likely impact by altering three elements: a 40
to 48-hour week, overtime pay of one to 1.5 times regular pay and exemption criteria for staff
such as managers and executives.
Depending on the scenario, it estimates the employers’ additional labour costs at HK$8
billion to HK$55.2 billion a year, or 1.7 per cent to 11.4 per cent of total expenditure on
wages. This compares with HK$3.3 billion a year resulting from a minimum wage of HK$28
an hour.
The report says that 1.32 million to 2.38 million workers will be affected if standard working
hours are set at 48 or 40 hours a week respectively.
Standard working hours practised in 12 countries and cities including Britain and Singapore
were also analysed.
“Experience in other places shows that [standard working hours] may eventually bring about
fragmentation of work and under-employment, if employees have to involuntarily work fewer
hours due to ensuing ad ustments in the labour market structure with an increase in part-
time or casual obs,” it says.
