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HK Government further refines its Employment Support Scheme

  • Asia
  • Hong Kong
  • Coronavirus - Workforce issues
  • State aid

14-05-2020

On May 12 and 13, the Hong Kong Government held a Technical Briefing on the Employment Support Scheme (“ESS”), provided more details about the ESS, issued a Q&A document, and confirmed that final details will be available next week. The information that they provided applies to the first tranche of the subsidy, which is for the period of June – August 2020.

Further to our previous update on 24 April 2020, we highlight the main changes announced by the government. New or changed information has been underlined for easy reference.

Employers may now choose from any one month from December 2019 to March 2020 (previously the choice was January to March 2020) as the “specified month” which will serve as the baseline

for the calculating the subsidies.

The government has also confirmed the conditions employers must agree to before accepting the ESS Subsidy:

  1. Employers must ensure that the number of its employees receiving wages during the Subsidy Payment Period of June to August is not below its number of paid or unpaid employees in March 2020.
  2. All subsidies received must be used for paying wages.
  3. Employers must not make redundancies during the Subsidy Payment Period.

Items 2 and 3 will not come as a surprise; it was previously well known that employers would be required to undertake not to make redundancies during the Subsidy Payment Period and to use the subsidy solely to pay wages.

It has also been confirmed that the main compliance metric will be to compare headcount during the Subsidy Payment Period against headcount in March 2020 (just before the ESS was announced). Previous information, however, indicated that the government would take into account total headcount, whereas the new information indicates that only staff who are receiving wages during the Subsidy Payment Period will be included in headcount at the end of the Subsidy Payment Period. In other words, any staff who are on unpaid leave will not be included in headcount figures. Somewhat confusingly, headcount in March 2020 will include all employees whether they were on unpaid leave or not.

Applications will be accepted from 25 May 2020 to 14 June 2020 on an online platform to be set up.

Enforcement Mechanism of the ESS:

  1. The government will rely on the number of employees and salary information provided by the MPF trustees in enforcing the conditions of the ESS Subsidy and to calculate the amount of subsidies payable. Employers will be required to authorise their MPF trustees to release certain information.
  2. If participating employers are found to have breached the conditions of the ESS Subsidy, they will be subject to a fine. The government will look at the seriousness of the breach and the size of the employer in determining the amount of the fine with details of the formula released next week.

The current mechanism as announced is MPF-centric. Employers with ORSO schemes will find their applications will take longer to process as the government would not be able to obtain information from the MPF trustees.

The Q&A document issued by the Hong Kong government may be found here and further details of the scheme (which we expect to be final) will be announced next week. The above details are currently only applicable for phase 1 of the ESS from June to August. We will provide a further update when the details of the scheme are released next week.

For more information contact

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