Gov't contracts wage-law compliant

June 02, 2011

Requiring contractors to pay the wages of their non-skilled workers engaged under government service contracts at a level no less than the statutory minimum wage rate, plus one paid rest day a week, complies with the Minimum Wage Ordinance.
 
In response to media reports on paid rest days for outsourced non-skilled Government workers today, the Labour Department said the arrangement complies with the revised standard employment contract for employees of government service contractors.
 
In formulating the new wage arrangement, the Government said it has thoroughly examined and balanced various factors, including elements of existing government service contracts, and the expected outcome and impact of implementation of the statutory minimum wage.
 
To give effect to the new wage arrangement, the Government has revised the standard employment contract, setting out the method for deriving the monthly wages of workers and one paid rest day in every period of seven days to ensure wages workers receive will be no less than the minimum wage for all months throughout the year.
 
Service contractors can appropriately reflect the impact of the new wage arrangement on operating costs in tender prices for new service contracts.
 
The Government's arrangement of providing one paid rest day for workers working less than six days a week seeks to prevent service contractors from avoiding the payment for rest day pay through "casualisation of employment", i.e. employing a large number of "casual workers" for the sake of obtaining the service contracts by raising the competitiveness of the tender prices at the expense of employees' interests.
 
The Government's arrangement will encourage service contractors to offer full-time posts as far as possible in the long run, and strikes a reasonable balance between enhancing service effectiveness and protecting workers' interests.
 
In practice, the majority of outsourced non-skilled workers work six days a week. Those working one or two days a week account for a small number. Hence, the arrangement of providing paid rest days will not result in significant increase in expenditure, the department said.
 
It reiterated the provision of one paid rest day in every period of seven days is developed solely for application to government service contracts that rely heavily upon the deployment of non-skilled workers and in no way seeks to set a guideline for the private sector.