It was announced this week that the Provisional Minimum Wage Commission had reached agreement on the initial minimum wage level, and was preparing a report to submit to Chief Executive Donald Tsang making its recommendation.

Commission Chair Teresa Cheng stated that:

"Commission members have prudently and objectively studied all factors including overseas experience in implementing minimum-wage systems, stakeholders' views and statistical data. We eventually came up with a conclusion after thorough discussion."

Although she declined to comment on Monday on the initial level of the minimum wage, it has been widely reported in the Hong Kong media as having been set at HKD28/29 (USD3.59/3.72) per hour.

The framework for the imposition of the new minimum pay level, the Minimum Wage Ordinance, was passed by the Legislative Council on July 17, and gazetted on July 23.

Announcing the passage of the Ordinance into the SAR's statute books, the Labour Department stated at the time that:

"The Ordinance will come into operation on a day to be appointed by the Secretary for Labour and Welfare by notice published in the Gazette. If everything proceeds well and allowing time for the community to gear up for the implementation of SMW, it is hoped that the initial SMW rate would come on stream in the first half of 2011."

However, the legislation has met with a mixed reception in Hong Kong. Unions had hoped for a higher rate of HKD33 per hour, and a poll reported on by the South China Morning Post suggested that Hong Kong residents were in favour of a rate of between HKD28 and HKD33.

Organisations representing the business community are also likely to be disappointed if the reported rates are correct, as they had been petitioning for a HKD24-25 minimum hourly wage.

There are concerns that unemployment may increase with the imposition of a minimum wage, especially within the catering, cleaning and security industries, with older workers expected to be disproportionately affected.