Hong Kong Government Assuages Firms' Fears At New Racial Discrimination Laws

by Mary Swire, Tax-News.com, Hong Kong

20 January 2006

A Hong Kong government official sought to assure businesses in the territory this week that new racial discrimination legislation will not affect their ability to attract talented foreign employees with special expat remuneration packages.

Under the law, which is expected to enter into effect later in the year, it will be illegal for companies to discriminate against employees on the grounds of race, colour or national or ethnic origin.

The private sector has raised concerns that their recruitment policies will leave them open to litigation on grounds of racism under the new laws and curtail their ability to attract highly skilled foreign workers.

However, speaking earlier this week, deputy secretary for home affairs Stephen Fisher assured firms that they would not be sued for putting workers recruited internationally on different payscales to local employees as the legislation is concerned more with discrimination on race, gender and religious grounds rather than country of origin.

"Expatriate pay packages will not be illegal under proposed racial discrimination legislation, but setting remuneration according to race will be," Mr Fisher said Tuesday.

"The idea is that employers can pay staff whatever is necessary to recruit and retain staff - housing, education and travel allowances for overseas staff are not unlawful," he added.

Nonetheless, employers looking to offer special pay deals will still need meet certain requirements under the proposed legislation. These include that the candidate is recruited overseas, is not a Hong Kong permanent resident, and that it can be proved their skills are not readily available locally.

"If someone stays in Hong Kong for seven years and applies for Hong Kong permanent residency, it's a conscious decision to give up expat pay packages," Mr Fisher explained.

But he added the exceptions for the overseas terms can continue only if the staff stays within the same company or group of companies.

The legislation is expected to be introduced to Legco within the current legislative year, Mr Fisher said.

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