Coronavirus: Hong Kong Government provides more details on the Employment Support Scheme - Hong Kong

• Hong Kong

• Coronavirus
• Employment law
• State aid

17-04-2020

We previously reported on the Hong Kong government’s Employment Support Scheme (“ESS”) to help employers defray salary costs and maintain employment. Earlier today on 17 April 2020, the government published more details on the ESS as it seeks to obtain funding in the legislative council. We now summarise the major features of the ESS:

• Baseline: Employers must choose a month between January and March 2020.
  
  
• Amount of subsidy per month: HK$9000 per employee or 50% of the employee’s salary in the designated month, whichever is lower
  
  
• Subsidy Payment Period: June to November 2020 (six months)
  
  
• Payment Schedule: Two Tranches in June and September 2020
  
  
• Application period: End of May to the first week of June 2020
  
  
• Eligibility: The subsidy is payable for every employee on the employer’s payroll in the designated month
  
  
• Conditions of the ESS subsidy:
  1) The employer must undertake not to implement any redundancy during the Subsidy Payment Period
  2) All ESS subsidies received must be used to pay wages of employees during the Subsidy Payment Period.

The current terms of the ESS subsidy do not restrict an employer’s ability to implement redundancies before the Subsidy Payment Period. There is no restriction on arrangements for unpaid leave or reduced salary. Labour unions have indicated that these may be potential loopholes that could lead to abuse by employers.

As a result, we anticipate that there will be further adjustments to the terms of the ESS subsidy before the its final approval by the Legislative Council and eventual implementation.