Should Companies Observe the Minimum Wage Law Requirements Even Though It May Lower Down Their Profit or Even Face Financial Difficulties?

Performance and Compensation Management |
Individual Essay |
Question: Should companies observe the minimum wage law requirements even though it may lower down their profit or even face financial difficulties?                 |

Introduction
  1. The controversial issue on the minimum wage has been debated for years and years, and it finally came to legislation in 2010 and was scheduled to be effective on the first of May 2011.

  2. The minimum wage law entitles all employees to a minimum hourly wage of $28, with the aim of “striking an appropriate balance between forestalling excessively low wages and minimising the loss of low-paid jobs while sustaining Hong Kong’s economic growth and competitiveness.” indicated by the Labour Department. There is for certain that the legislation has great and substantial impacts on hundreds of thousands of employees and employers directly, and potentially the rest of Hong Kong’s population. Whether the impacts are good to employees are in doubt — earning more than before or receiving less due to a cut on work hours? In fact, it all depends on how their employees cope with the law. On the other hand, the impacts on employees tend to be negative that companies earn less due to a legislative wage floor or even find it hard to continue their business. Under this situation, some companies observe the law strictly even so, while some companies find ways to take advantage of grey zones in the law to cut their employees.

  3. In this essay, I will discuss whether companies should observe the minimum wage law requirements even though it may lower down their profit or even face financial difficulties. The arguments will comprehensively analyze the concerns of different stakeholders, including employers, employees, customers and people, and the social issues with respect to the question. And lastly a conclusion will be derived and so as practical recommendations for the question.

Implications to employers
  4. First of... [continues]

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