Human Resources Management: How to Improve Minimum Wage Policy Management in Hong Kong Essay

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(Lovells, et al., 2012, paraphrased) In terms of record keeping, beginning May 1, 2013, employers are required by law to keep records of the employee's total worked hours where the employee's wage during any wage period total less than $12,300 which has been increased from HK$800 and when an employee is averaging more than $12,300 per month the net wages of the employee may be reduced by the exclusion of unworked time that is paid is less than $12,300 however, the Ordinance required record keeping will still be in effect. Therefore, it is necessary that employers keep good records of the number hours that each employees work. (Lovells, et al., 2012, paraphrased) It is stated to be critical to note that the calculation method and the Ordinance key requirements will not change on the first day of May 2013 and employers were required that their systems must be updated so that they are paying all their employees at least the statutory minimum hourly wage rate of HK$30." (Lovells, 2012, p. 1)Download full Download Microsoft Word File
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TOPIC: Essay on Human Resources Management: How to Improve Minimum Wage Policy Management in Hong Kong Assignment

The Minimum Wage Commissions in its "Summary of Views Collected at Consultation Meetings" reports that in its initiative to examine the views and related concerns on the impact of the statutory minimum wage initiation as well as on the rate of the statutory minimum wage, the Commission held consultation meetings with 105 stakeholder groups in the fourth quarter of 2011 and reports that stakeholders that participated in the meetings included: (1) major trade unions; (2) major employers' associations; (3) associations of small and medium enterprises (SMEs); (4) associations of low paying sectors. (Minimum Wage Commissions, 2013, paraphrased) In the Commission's 'Summary of Views' it is reported that the impacts on the economy of the statutory minimum wage rate includes the view held by employers' associations and employer representatives that the beginning SNW rate began during a time of economic prosperity in Hong Kong and did not adversely affect the varied enterprise and sectors in Hong Kong. However, the real affect of Statutory Minimum Wage could not become clear in the short-term but in the long-term the affects because all too clear. Due to the economic environment of 2012, Statutory Minimum Wage had an adverse impact on the employers since low-paid workers wage grew to $28 per hour and this required employers to raise their prices so they could cover the labor costs that had expoentiatlly increased resulting in "wage-price spiral and inflation." (Minimum Wage Commissions, 2013) It is reported that labor unions and labor policy concern groups held that the statutory minimum wage rate implementation had not caused the economic problems that were predicted and neither had business been required to close at a rate predicted. Mitigation had been utilized by employers to deal with the changes occurring due to the implementation of Statutory Minimum Wage and it is reported that while labor costs had increased that there had been no intensification of inflation. In fact, the increase in the wages boosted the purchasing power of consumer/workers and the local economy had been given a boost and ultimately increased wages had worked to improve the overall economic outlook in Hong Kong, (Minimum Wage Commissions, 2013, paraphrased) In regards to the impacts on the labor market by the implementation of the statutory minimum wage, it is related that labor unions were of the view that the implementation of the statutory minimum wage rate had resulted in the workers being guaranteed an income level that resulted in improvements in their standard of living with no cause of loss of jobs and the unemployment rate not being driven up. As well the Statutory Minimum Wage being introduced movitated workers and gove them incentive encouraging women and the elderly to re-enter the labor market and ultimately raised the total employment in Hong Kong. The Minimum Wage Commission reports that the rise in the minimum wage had benefitted Hong Kong in all aspects and it had been agreed upon by all that the move had been beneficial to both workers and the economy. Finally, employers had also benefited from the increase in the statutory minimum wage. Labor market mobility was enhanced. The statutory minimum wage had been introduced during a time of economic growth and prosperity while many new businesses wee opening their doors and there was a growth in demand for labor in specific sectors including security, catering and estate management industries. Mitigating measures used by some enterprises for offsetting the increased statutorty iminimum wage included reduction in non-wage benefits, changing employment terms as well as other initiatives. Some of the enterprises had transferred the increases by raising costs to consumers. However, it is reported that there were some enterprises that could not handle the rise in the statutory minimum raise and due to their need to control the costs of labor ultimately loss some of its labor force. According to some of the employers' associations "the significant pay rise for workers in the low paying sectors or lower-skilled occupations upon the implementation of Statutory Minimum Wage, employees in other industries and occupations would expect to have comparable pay rise. Enterprises thus had to face additional labor costs on top of those required for meeting the statutory requirement of Statutory Minimum Wage." (Minimum Wage Commissions, 2013) It is related that the primary concern of think tanks and policy research institutes were the impacts of the statutory minimum wages on the employment opportunities for those know to be "marginal and vulnerable workers" which is reported to be inclusive of "the elderly, the disabled, inexperienced young people, trainees and low skilled workers, etc.)." (Minimum Wage Commissions, 2013)

The implementation of the statutory minimum wage rate is reported to have driven up property management fees. It is reported that for those property owners with financial means that were limited and particularly those who owned single block private residential buildings that costs were saved through reduction of security guard services to one shift by doing away with the night shift service. Employment chances for security guards that are elderly were impacted. Employers' associations and employer's representative of the catering industry noted that the profit margin of restaurants that were small and mid-sized was marginal. Specifically stated is that the implementation of the statutory minimum wage, in a labor intensive industry has incrased the labor cost significantly. Restaurant employers did not find themselves able to pass the additional cost of labor on to consumers so the quality and quantity of food had been their method of attempting to cope and many restaurants simply closed their doors. This resulted in market share shrinkage and displacement by larger or franchise restaurants. It is posited by labor unions that the reason so many restaurants closed was due to high rent and was somewhat but not significantly attributed to the rise in the statutory minimum wage. (Minimum Wage Commissions, 2013, paraphrased) Additionally reported was that retail and catering industry employer representatives related that in the past who were paid on the lowest scale were motivated to provide higher quality service and to perform better so that they could earn better wages however, at the time the statutory minimum wage was introduced and employees knew that they would receive a certain wage, the motivation to continually improve their service and performance fell and this likely resulted in a drop in the quality of service provided. (Minimum Wage Commission, 2013, paraphrased) SME associations and employer representatives from the elderly care home industry are reported to have expressed "that owing to the obnoxious nature of the industry, they suffered persistent labor shortage. As the wages of other sectors rose upon the implementation of Statutory Minimum Wage, an increasing number of employees left the industry, thus affecting the service quality of elderly homes. Moreover, the cost in wages and rental constituted a huge share of the gross expenses of elderly homes. Some operators in the industry started to downsize their business since they were unable to bear the increasing operating cost. Enterprises might choose to relocate their business to the Mainland if labor costs were to increase further." (Minimum Wage Commissions, 2013)

Stakeholders form the cleaning industry reported that the implementation of the statutory minimum wage has resulted in more cleaning workers to switch to other sectors. Companies report having to pay wagers higher than the statutory minimum wage level to recruit suitable workers and as well the assessment of premium employee's compensation was conducted on the basis of the payroll and the related expenditure is reported to have risen with "wage uprating." (Minimum Wage Commissions, 2013)

It is reported that some of the smaller operators in the industry shut their businesses down due to the high operating cost. Stakeholders in the logistics industry related that their industry's staff turnover was critical following the statutory minimum wage implementation with a great many of its frontline workers and those workers in the junior to middle management sectors switching to sectors that have employment terms which are superior.… [END OF PREVIEW] . . . READ MORE

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