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Government announces further details about the Employment Support Scheme

  • Hong Kong
  • Employee share schemes

22-04-2022

Introduction

The Hong Kong government first announced its new Employment Support Scheme (“ESS 2022”) at the end of March as part of its Anti-epidemic Fund. On 7 April, the government announced further details about the ESS 2022 in a second press conference, following consultations with various stakeholders. The government subsequently announced on 12 April that HK$43 billion in funding to implement the ESS 2022 had been approved by LegCo.

The more recently announced enhancements to the ESS 2022 mean a greater number of employees from a wider range of industries will be eligible for the scheme when compared with the initial announcement. We set out below the main changes to the scheme since our previous briefing, which outlined the initial announcement about the ESS 2022 last month.

Eligibility

Types of businesses - previously, specific businesses such as supermarkets, pharmacies and delivery firms which were assessed not to have been adversely impacted by the COVID-19 pandemic were excluded from the ESS 2022. Rather than a blanket exclusion of such businesses, there will now be a “restricted list” of businesses. A company in a business sector on the restricted list may only claim subsidies for 100 employees. There will still be an “excluded list” of employers that are ineligible to receive the subsidies. These include government and statutory bodies as well as publicly-funded organisations.

Salary cap - after consulting with various stakeholders, the government has decided to drop the previous salary cap of HK$30,000 a month. As a result, employees paid more than HK$30,000 a month may also receive a subsidy under the ESS 2022.

Number of employees – the government stated that the number of eligible employees for each company will be capped at 1,000, citing the need to focus resources on supporting small and medium enterprises (“SMEs”).

The government also announced changes to the calculation of the number of employees for each company, stating that it is not mandatory to base the number of employees on data submitted back in the first round of the ESS in 2020, and that employers may choose to calculate the number of their employees based on employee data in the fourth quarter of 2021. It appears that this calculation will be based on MPF contribution data, similar to the first round of the ESS.

Amount of subsidy – it was previously proposed that each eligible worker should receive a subsidy of HK$24,000 for the period from May to July 2022, equivalent to HK$8,000 per month. The government announced that part time employees and freelancers will also be eligible to benefit from the scheme; however, they will only be eligible to receive HK$4,000 a month. Both employees and self-employed persons who are aged 65 and above can also benefit from the scheme as long as they have an MPF account. It will be interesting to see how the government defines part time employees as the Employment Ordinance does not have a definition for part-time employees.

Application process

The government aims to invite applications in April over a two week period, and to make the first tranche of payments to successful candidates in May.

For more information on the ESS 2022, please see the government press release (in Chinese) and the government news media article (in English).