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Law No. 5/2020 “Minimum Wage for Employees” (Effective from 1 November 2020)1. Scope of application:
The minimum wage system applies to employees in all industries, except for domestic helpers and employees with disabilities.
2. Composition of the minimum wage:
The minimum wage refers to the basic remuneration provided for in Article 59 of the Labour Relations Law, excluding overtime remuneration, extraordinary remuneration for night work or shift work, and thirteenth month pay or other periodic benefits of a similar nature.
Non-resident workers’ right to lodging is not included in the minimum wage because it is a special right.
3. Minimum wage rates (Law No. 19/2023 “Amendment to Law No. 5/2020 ‘Minimum Wage for Employees’” has taken effect from 1 January 2024):
| Single remuneration calculation mode | Minimum wage rates | |
| From 1 November 2020 to 31 December 2023 | From 1 January 2024 | |
| Monthly remuneration | MOP 6,656 per month | MOP 7,072 per month |
| Weekly remuneration | MOP 1,536 per week | MOP 1,632 per week |
| Daily remuneration | MOP 256 per day | MOP 272 per day |
| Hourly remuneration | MOP 32 per hour | MOP 34 per hour |
| Piece rate or commission-based remuneration | Average MOP 32 per hour | Average MOP 34 per hour |
| Combined remuneration calculation mode | Minimum wage rates | |
| From 1 November 2020 to 31 December 2023 | From 1 January 2024 | |
| Monthly pay + piecework pay or commission | MOP 6,656 per month | MOP 7,072 per month |
| Weekly pay + piecework pay or commission | MOP 1,536 per week | MOP 1,632 per week |
| Daily pay + piecework pay or commission | MOP 256 per day | MOP 272 per day |
| Hourly pay + piecework pay or commission | MOP 32 per hour | MOP 34 per hour |
4. An employer and an employee may, by agreement, adopt any of the remuneration calculation modes provided for in the law, but the basic remuneration paid by the employer to the employee must not be lower than the minimum wage rate for that mode of remuneration calculation. Examples are given below to illustrate the changes before and after the minimum wage increase:
| Example (1): Monthly-rated employees | |
| Employee A, a cleaner of a cleaning company and responsible for office cleaning, is remunerated monthly at $6,900 per month by agreement. | |
| Pay period | From the 1st to the 30th/31st of each month |
| Before the minimum wage increase Remuneration of Dec 2023 |
Employee A’s monthly remuneration was $6,900, so it already met the minimum wage requirement of $6,656 per month at the time. |
| After the minimum wage increase Remuneration of Jan 2024 |
►The minimum wage rate applicable to Employee A is $7,072 per month. ►The employer is required to increase the original agreed monthly remuneration of $6,900 to an amount not less than $7,072 per month. $7,072 - $6,900 = $172 From January 2024, the employer is required to pay the difference of at least $172 to ensure that the employee’s monthly remuneration is not less than $7,072. |
| Example (2): Monthly-rated employees | |
| Employee B, a cleaner of a cleaning company and responsible for office cleaning, is remunerated monthly at $6,900 per month by agreement. | |
| Pay period | From the 16th of a month to the 15th of the following month |
| Before the minimum wage increase Remuneration from 16 to 31 Dec 2023 |
►Until 31 December 2023, the minimum wage rate applicable to Employee B was $6,656 per month. ►Employee B’s monthly remuneration was $6,900, so it already met the minimum wage requirement of $6,656 per month at the time. ►For the remuneration from 16 to 31 December 2023, the original agreed remuneration applied as it was higher than the minimum wage rate at the time. |
| After the minimum wage increase Remuneration from 1 to 15 Jan 2024 |
►From January 2024, the minimum wage rate applicable to Employee B is $7,072 per month. ►From January 2024, the employer is required to increase the monthly remuneration to an amount not less than $7,072 per month. ►Employee B’s original agreed remuneration is lower than the monthly minimum wage adjusted from January 2024, so the employer is required to pay the difference for the remuneration from 1 to 15 January 2024: ($7,072 - $6,900) ÷ 30 days × 15 days = $86 |
| Total | The employer is required to pay Employee B the remuneration from 16 December 2023 to 15 January 2024: $6,986 ($6,900+$86). |
| Example: Piece rate remuneration (single remuneration calculation mode) | |
| Employee C, a garment factory worker and responsible for sewing sleeves, is remunerated based on the sleeves completed, at a rate of $2 per pair of sleeves. | |
| Before the minimum wage increase Remuneration of Dec 2023 |
Employee C worked 180 hours and finished 3,000 pairs of sleeves in the month and received a remuneration of $6,000. |
| Does it meet the minimum wage requirement? | ►The minimum wage rate applicable to Employee C was an average of $32 per hour for piece rate or commission-based remuneration. ►Average remuneration per hour: Basic remuneration for the month ÷ Actual hours worked for the month $6,000 ÷ 180 hours = $33.3 Employee C’s average remuneration per hour was $33.3 in December, so it already met the minimum wage requirement. |
| After the minimum wage increase Remuneration of Jan 2024 |
Employee C worked 175 hours and finished 3,100 pairs of sleeves in the month and received a remuneration of $6,200. |
| Does it meet the minimum wage requirement? | ►The minimum wage applicable to Employee C is an average of $34 per hour for piece rate or commission-based remuneration. ►Average remuneration per hour: Basic remuneration for the month ÷ Actual hours worked for the month $6,200 ÷ 175 hours = $35.4 Employee C’s average remuneration per hour was $35.4 in January, so it has already met the minimum wage requirement. |
| Example: Monthly pay plus commission (combined remuneration calculation mode) | |
| Employee D, a salesperson of a food souvenir shop and responsible for selling food products, receives a monthly remuneration consisting of a basic pay of $3,000, a meal allowance of $500, and a commission calculated based on sales volume. | |
| Before the minimum wage increase Remuneration of Dec 2023 |
Employee D received a basic pay of $3,000, a meal allowance of $500 and a commission of $3,200, equal to a remuneration of $6,700 in total for the month. |
| Does it meet the minimum wage requirement? | Employee D is a worker receiving a monthly pay plus commission, so the minimum wage rate appliable to Employee D was $6,656 per month. As the remuneration (basic remuneration) received for the month totalled $6,700, it already met the minimum wage requirement. |
| After the minimum wage increase Remuneration of Jan 2024 |
Employee D received a basic pay of $3,000, a meal allowance of $500 and a commission of $3,700, equal to a remuneration of $7,200 in total for the month. |
| Does it meet the minimum wage requirement? | Employee D is a worker receiving a monthly pay plus commission, so the minimum wage rate appliable to Employee D is $7,072 per month. As the remuneration (basic remuneration) received for the month totalled $7,200, it has already met the minimum wage requirement. |
5. Overtime remuneration:
The remuneration for overtime work must not be lower than the amounts shown in the following tables:
| From 1 November 2020 to 31 December 2023 | ||||
|---|---|---|---|---|
| Remuneration calculation mode | Minimum wage rates | Normal remuneration per hour used to calculate overtime remuneration | Remuneration for voluntary overtime work (with extra pay of 20%) | Remuneration for non-voluntary overtime work (with extra pay of 50%) |
| Monthly remuneration | $6,656 | $6,656÷30÷8=$27.7 | $27.7×1.2=$33.2 | $27.7×1.5=$41.6 |
| Weekly remuneration | $1,536 | $1,536÷6÷8=$32 | $32×1.2=$38.4 | $32×1.5=$48 |
| Daily remuneration | $256 | $256÷8=$32 | $32×1.2=$38.4 | $32×1.5=$48 |
| Hourly remuneration | $32 | $32 | $32×1.2=$38.4 | $32×1.5=$48 |
| Piece rate or commission-based remuneration | $32 | $32 | $32×1.2=$38.4 | $32×1.5=$48 |
| From 1 January 2024 | ||||
|---|---|---|---|---|
| Remuneration calculation mode | Minimum wage rates | Normal remuneration per hour used to calculate overtime remuneration | Remuneration for voluntary overtime work (with extra pay of 20%) | Remuneration for non-voluntary overtime work (with extra pay of 50%) |
| Monthly remuneration | $7,072 | $7,072÷30÷8=$29.5 | $29.5×1.2=$35.4 | $29.5×1.5=$44.25 |
| Weekly remuneration | $1,632 | $1,632÷6÷8=$34 | $34×1.2=$40.8 | $34×1.5=$51 |
| Daily remuneration | $272 | $272÷8=$34 | $34×1.2=$40.8 | $34×1.5=$51 |
| Hourly remuneration | $34 | $34 | $34×1.2=$40.8 | $34×1.5=$51 |
| Piece rate or commission-based remuneration | $34 | $34 | $34×1.2=$40.8 | $34×1.5=$51 |
In terms of the changes before and after the minimum wage increase, examples are given below to explain how to calculate overtime remuneration:
| Example (1): Monthly-rated employees | |
| Employee E, a security guard of a property management company and responsible for the security of a residential building, with normal working hours of eight hours per day, is remunerated monthly by agreement, with a basic pay of $6,400 and a duty allowance of $300 per month. | |
| Pay period | From the 16th of a month to the 15th of the following month |
| Provision of overtime work before the minimum wage increase | Remuneration: ►The remuneration (basic remuneration) received by Employee E for the month totalled $6,700, so it already met the minimum wage rate of $6,656 per month. Overtime remuneration: ►Employee E voluntarily provided three hours of overtime work on 19 December 2023. ►Employee E’s basic pay was $6,400, and the normal remuneration per hour used to calculate overtime work was: Normal remuneration for the month ÷ 30 days ÷ Normal working hours per day $6,400 ÷ 30 days ÷ 8 hours = $26.7 per hour ►The above amount is lower than the statutory normal remuneration per hour used to calculate overtime remuneration for monthly-rated employees ($27.7),so the remuneration for overtime work provided by Employee E voluntarily on 19 December 2023 should be calculated based on the statutory normal remuneration per hour for monthly-rated employees, that is: $27.7 × 1.2 times × 3 hours = $99.7 |
| Provision of overtime work after the minimum wage increase | Remuneration: ►From January 2024, the minimum wage rate applicable to Employee E is $7,072 per month. ►Employee E’s original agreed remuneration (basic remuneration) was $6,700 in total, so the employer is required to increase the monthly remuneration to an amount not less than $7,072 per month starting from January 2024. Overtime remuneration: ►Employee E voluntarily provided two hours of overtime work on 10 January 2024. ►On and after 1 January 2024, the minimum wage rate applicable to Employee E is $7,072 per month. ►On and after 1 January 2024, the statutory normal remuneration per hour used to calculate overtime remuneration for monthly-rated employees is $29.5. ►The remuneration for overtime work provided by Employee E voluntarily on 10 January 2024 should be calculated based on an amount not lower than the statutory normal remuneration per hour for monthly-rated employees, that is: $29.5 × 1.2 times × 2 hours = $70.8 |
| Example (2): Daily-rated employees | |
| Employee F, a dishwasher of a restaurant and responsible for washing the dishes, with normal working hours of eight hours per day, is remunerated daily by agreement, with a basic pay of $240 and a meal allowance of $30 per day. | |
| Pay period | From the 16th of a month to the 15th of the following month |
| Provision of overtime work before the minimum wage increase | Remuneration: ►The remuneration (basic remuneration) received by Employee F for the day totalled $270, so it already met the minimum wage rate of $256 per day. Overtime remuneration: ►Employee F voluntarily provided four hours of overtime work on 24 December 2023. ►Employee F’s basic pay was $240, and the normal remuneration used to calculate overtime work was: Normal remuneration for the day ÷ Normal working hours per day $240 ÷ 8 hours = $30 per hour ►The above amount is lower than the statutory normal remuneration per hour used to calculate overtime remuneration for daily-rated employees ($32),so the remuneration for overtime work provided by Employee F voluntarily on 24 December 2023 should be calculated based on the statutory normal remuneration per hour for daily-rated employees, that is: $32 × 1.2 times × 4 hours = $153.6 |
| Provision of overtime work after the minimum wage increase | Remuneration: ►From January 2024, the minimum wage rate applicable to Employee F is $272 per day. ►Employee F’s original agreed remuneration (basic remuneration) was $270 in total, so the employer is required to increase the daily remuneration to an amount not less than $272 per day starting from January 2024. Overtime remuneration: ►Employee F voluntarily provided one hour of overtime work on 6 January 2024. ►On and after 1 January 2024, the minimum wage rate applicable to Employee F is $272 per day. ►On and after 1 January 2024, the statutory normal remuneration per hour used to calculate overtime remuneration for daily-rated employees is $34. ►The remuneration for overtime work provided by Employee F voluntarily on 6 January 2024 should be calculated based on an amount not lower than the statutory normal remuneration per hour for daily-rated employees, that is: $34 × 1.2 times × 1 hour = $40.8 |