Hong Kong Civil Service Gets 2% Raise, June 15

Hong Kong’s Executive Council approved a 2% pay raise for civil servants effective April 1, 2026, affecting 170,000 employees. Unions say the increase falls short of inflation and amounts to a real pay cut. The government also plans to launch a new performance review system in October that will freeze raises for at least 5% of underperforming staff for six months.

Why 2% Does Not Track Inflation

Civil Service Bureau chief Yang Ho-pui-yan said pay adjustments do not aim to match inflation rates. She noted that over 25 years since 2001, cumulative salary increases have outpaced cumulative inflation. The six factors considered include Hong Kong’s economic state, living cost changes, government finances, salary trend surveys, union demands, and staff morale. Critics point out that the salary trend net indicators for high, middle, and low-level staff are 4.12%, 2.64%, and 1.17% respectively, meaning the 2% raise falls below these benchmarks.

Unions Argue Two Years of Below-Inflation Raises

The Civil Service Association criticized the 2% raise, noting that staff faced a pay freeze last year. Combined with this year’s increase, cumulative raises over two years fall short of the 3.8% inflation threshold, effectively reducing purchasing power. Yang defended the adjustment by saying the government looks at long-term trends rather than year-to-year changes. She emphasized that civil servants gain satisfaction from helping the public, not just from salary increases.

New Performance System Freezes Raises for Low Performers

The government plans to roll out a new evaluation system in October that grades staff on a six-level scale. Those rated level four or below will have salary increments frozen for six months. Yang said at least 5% of staff are expected to fall into lower performance tiers, though she stressed this is not a hard quota. Multiple unions have opposed the measure, but Yang said the government will proceed regardless and review the system after two years.

Government Pushes Ahead Despite Union Opposition

Yang stated the government will continue with the performance review plan even if unions object. She said staff will eventually understand the changes are meant to strengthen the civil service. The system will roll out gradually, starting with one or two core job categories in each department, with the Civil Service Bureau leading by example in four graduate-level positions. Yang emphasized the goal is to help struggling staff through coaching and training, not to punish them.

Final Thoughts

The 2% raise leaves civil servants behind inflation over two years, though the government argues long-term trends show salary growth outpacing prices. The new performance review system will add pressure on staff, with raises frozen for underperformers starting October.

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