The Executive Council on Tuesday approved a shake-up of the way Hong Kong's minimum wage is decided, with the wage floor to be reviewed every year in future instead of every two.

Calculations will include the SAR's economic growth rate in the previous year, as well as consumer prices.

There'll be no chance of the minimum wage being reduced regardless of what the figures suggest, with any negative calculation leading to a freeze instead.

The government said it is making the changes based on recommendations from the Minimum Wage Commission, which consulted labour and employer groups as well as academics on the matter last year.

The first minimum wage under the new mechanism will be set in two years' time.

"The recommendations of the [commission] have struck an appropriate balance between the objectives of forestalling excessively low wages and minimising the loss of low-paid jobs, while giving due regard to sustaining Hong Kong's economic growth and competitiveness," said Labour Secretary Chris Sun.

Hong Kong's minimum wage is currently set at HK$40 per hour. The Minimum Wage Commission is to submit a report by the end of October on its recommendations for any change.