Hong Kong Civil Service Gets 2% Raise Despite Union Backlash, June 15

Hong Kong’s Executive Council approved a 2% pay raise for all civil servants effective April 1, 2026, ending a one-year freeze. Unions argue the increase amounts to a real pay cut because inflation over two years exceeds 2%. Civil Service Bureau chief Yang Ho Pui-yan said the government does not simply track inflation when setting pay.

Why Unions Say Workers Lose Ground

The Civil Service Union criticized the 2% raise, claiming that with cumulative inflation over two years, the effective increase falls short of 3.8%, resulting in a real pay cut. Workers faced a salary freeze in 2025 after a 3% raise in 2024. The union argues that public servants’ purchasing power has weakened over this period.

Government’s Six-Factor Formula

Yang Ho Pui-yan stated that civil service pay adjustments consider six factors: Hong Kong’s economic state, cost of living changes, government finances, salary trend net indicators, union demands, and staff morale. The salary trend net indicators show 4.12% for senior staff, 2.64% for mid-level workers, and 1.17% for junior staff. A 2% raise means senior and mid-level workers receive less than the net indicator suggests.

Long-Term View Versus Year-to-Year Changes

Yang Ho Pui-yan emphasized that pay adjustments should not track inflation year by year. She noted that since 2001, cumulative civil service pay increases have outpaced cumulative inflation over the 25-year period. The government argues that looking at short-term swings misses the broader trend of stable purchasing power for public servants.

New Performance Review System Coming October

Starting October 2026, the government will roll out a performance-based evaluation system. At least 5% of civil servants rated as level 4 or below will have salary increments frozen for six months. Yang Ho Pui-yan said the government will continue the rollout even if unions object, and plans a two-year review. She emphasized the system aims to help underperforming staff through training and mentoring.

Final Thoughts

Hong Kong’s 2% civil service raise reflects a formula-based approach rather than inflation tracking, but unions see it as a real pay cut. The government will push ahead with new performance reviews in October despite union opposition.

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