Lawmakers welcomed the shift from biennial to annual minimum wage reviews, saying this would enhance the quality of life of grassroots workers.

Hong Kong's statutory minimum wage will increase from HK$40 to HK$42.1 an hour, following a 5.25 percent recommendation from the Minimum Wage Commission.

This new rate is set to take effect on May 1, pending lawmakers' approval, and will be reviewed annually instead of biennially.

Lam Chun-sing, chairman of the Legislative Council's manpower panel, said reviewing wages annually allows minimum wage workers to better pace their earnings with inflation each year.

He told RTHK that the government's freeze on minimum wage levels during the pandemic led to four years without salary increases for grassroots workers despite inflation, severely affecting their ability to maintain their purchasing power and living standards.

Lam hopes future adjustments to the minimum wage would give greater weight to economic growth, so that workers could benefit more substantially from gains in the economy.

"We hope that later ... after three or five years we can review the formula to see whether we can increase the proportion of the calculation of growth of the GDP so that if there's a large increase in GDP, then we can also have a large increase in minimum wage levels so that the grassroots worker can share the fruits of economic development," he said.

Meanwhile, lawmaker Kwok Wai-keung, of the Federation of Trade Unions, said they would continue to communicate with the government to see whether a review could be conducted within five to 10 years after this reform was completed.

He added the increase was unlikely to have a major impact on the labour market, as only about 20,000 of the 3.6 million workers in the SAR earn the minimum wage.

"The number of grassroots workers is small and their roles are concentrated in cleaning and security. We have heard that many companies in these industries already pay wages above the minimum wage, meaning that this adjustment will not affect those already earning more than the minimum," he said.

"Thus, we believe it will not have a major impact on the economy or competitiveness."