Hong Kong government should fully subsidise costs for employers under plan to extend maternity leave, business and union representatives say

The Hong Kong government should bear all extra costs for employers – which could be more than HK$1 billion yearly – under a proposal to increase maternity leave for workers by four weeks, two high-profile representatives from the city’s business sector and unions said.

The comments by Liberal Party leader Felix Chung Kwok-pan and Federation of Trade Unions honorary president Chan Yuen-han centred on a plan by officials to extend the maternity leave from 10 to 14 weeks, with subsidies offsetting the costs on employers to be capped at an amount.

A government source said the proposal of granting women four extra weeks of maternity leave would likely be mentioned in the coming policy address by Chief Executive Carrie Lam Cheng Yuet-ngor on October 10.

“It is likely to be implemented in the civil service first as that would not require any amendment to existing laws,” the source added.

Currently, pregnant workers can receive 80 per cent of their salary on a 10-week leave, if they have been working for 40 weeks or more under the same employer.

The government’s proposal suggests subsidies to offset employers if the duration is increased to 14 weeks, but this would be in full only for workers under a certain salary limit. Employers will bear the cost from the extension for those who earn above the mark.

Speaking on a radio show, Chung said Hong Kong’s median income was HK$18,000 and there were about 50,000 newborns in the city each year, so the annual cost of extending the maternity leave would be about HK$900 million to more than HK$1 billion.

Chung said the additional cost incurred was small compared to the government’s fiscal surplus and therefore officials should not set a cap on subsidies.

 “[Otherwise,] it will just sound [to employers] like [the government] is treating the guests, while they pay the bill,” Chung said.

The city’s fiscal surplus reached HK$138 billion this year.

Chan, who is also chairwoman of the government-appointed Women’s Commission, said authorities would appear petty if they set a limit on subsidies, and the measure should be introduced with boldness.

“If you say, employers need to pay for [part of the cost] for those with a higher salary, then there would be more conflict,” she said.

She added the government should treat all workers equally to make the policy introduction smooth.

The labour union leader also suggested officials review the measure if it were to be implemented, and even consider extending the leave to 16 weeks or 18 weeks.

Chung said the 14-week proposal would be hard to digest for small and medium businesses, amid other labour-friendly policies such as a planned extension of the paternity leave from three days to five, and during a time when the economy is expected to be affected by the escalating US-China trade war.

“If it’s just a single issue, there should be no big deal,” he said.

He questioned whether the government could let businesses implement the proposal one at a time so they could adjust accordingly.

This article appeared in South China Morning Post  online.