The Chief Executive-in-Council today announced that it has accepted the Minimum Wage Commission’s recommendations on enhancing the review mechanism for the statutory minimum wage (SMW). These include reviewing the SMW rate once a year.
 

The recommendations also include adopting a formula for implementing the annual review and reviewing the new mechanism five to ten years after its implementation.
 

The first SMW rate derived under the new mechanism will take effect on May 1, 2026, the Government said.
 

It added that, following extensive consultations, the commission recommended adopting the annual review policy to allow closer alignment of the SMW rate with socio-economic changes and to safeguard the income of grassroots employees more effectively.
 

It explained that the formula proposed by the commission involves two indicators – inflation and economic growth.
 

The former ensures that the rate of adjustment to the SMW will not fall below the headline Consumer Price Index inflation, so as to maintain the SMW’s purchasing power and safeguard the employment income of grassroots employees.
 

Meanwhile, the second indicator enables the rate of increase in the SMW to be suitably higher than inflation when the Hong Kong economy performs well.
 

Secretary for Labour & Welfare Chris Sun said he is very pleased with the commission’s recommendations on enhancements to the SMW’s review mechanism.
 

He paid warm tribute to commission Chairperson Priscilla Wong for her exemplary leadership and to all commission members for their unstinting efforts and contributions.
 

Mr Sun pointed out that the commission’s recommendations strike an appropriate balance between the objectives of forestalling excessively low wages and minimising the loss of low-paid jobs, while giving due regard to sustaining Hong Kong’s economic growth and competitiveness.
 

“The Government agrees that the adoption of a formula for adjusting the SMW rate will enhance predictability and transparency, thereby reducing the contention of the community over the rate of each SMW adjustment, and helping foster harmonious labour relations.
 

“The Government also believes that the new review mechanism is in line with the overall interests of Hong Kong.”
 

Moreover, in accordance with the requirements of the Minimum Wage Ordinance, the Chief Executive will require the commission to submit its next recommendation report on the SMW rate on or before October 31 this year. The next SMW rate recommended by the commission will take effect on May 1, 2025.