CONFIDENTIAL
Frequency of wage payments
It was mentioned by Lord Shepherd at a meeting in the Government House on Thursday, 5th June 1969, that the widespread practice of paying wages monthly means that in a case of failure, such as the Goodman Corporation incident, considerable sums due to workers for wages may remain unpaid. The Minister suggested the possibility that legislation to compel employers to pay wages weekly as in the U.K. and most other industrial countries would substantially reduce the amount of wages outstanding at any time. He believed that this would also be sound social policy in reducing the tendency of workers to live in a state of considerable indebtedness.
2.
It is unfortunate that there are no statistics readily available in Hong Kong to show clearly the extent to which employed persons are paid wages monthly or on any other wage period basis. There is general agreement in the Department that the overwhelming majority of industrial workers are on piece or daily rates of wages which are paid twice-monthly. The usual practice is to pay wages earned from the 1st to the 15th day of a calendar month on or before the 22nd of the month and wages earned during the period from the 16th to the end of the month during the first seven days of the next month. In a significant number of cases but a comparatively small proportion overall, wages are paid three times a month on the basis of 1st to the 10th, 11th to 20th and 21st to the end of the month. In about the same number of cases wages are paid only once a month and in a few more or less isolated cases such as the Hong Kong Tramways wages are paid weekly. In all these different categories practices vary slightly. For instance, quite often only the payment at the end of the month clears wages for the month and the intermediate payments are in the nature of advances or estimated amounts which are subject to adjustment when the final payment is made. It might be useful to compile statistics to show the numbers of workers on the various systems of wage payment so as to keep a running picture of changes. This could probably be done quite simply by including an appropriate question in the annual sample survey of wages.
3.
The picture of wage periods in the non-industrial sector is less clear. It is believed that in this sector the monthly wage period is still more or less general and a much larger proportion of employees in shops and offices are on monthly rates. There would almost certainly be very strong employee opposition to any change in this sector which would apparently reduce status by substituting a weekly wage rate for the present monthly rate. There would probably be less opposition if the rate of wages remained on a monthly basis but payments were made at weekly or fortnightly intervals which would also be possible.
4.
From an employer point of view there might well be justifiably strong objection to more frequent wage payments particularly if wages have to be paid in full for each shorter wage period. Indeed in Singapore and Malaysia when the idea was mooted as a measure to reduce the chronic indebtedness of workers, Government Departments like the P.W.D. which were major employers spearheaded the objections. The preparation of wage sheets and procedures for wage payments involve much the same amount of work whatever the wage periods may be. The change from a basis of payment monthly to payment weekly is therefore quite likely to quadruple the cost of wage administration. There are further difficulties in Hong Kong because
CONFIDENTIAL
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