Update: Further Clarification to Hong Kong Employment Support Scheme on 20 April 2020

By Pattie Walsh, Jeannette Tam

04-2020

The Legislative Council Finance Committee approved funding on 18 April 2020 to launch the HK$81 billion Employment Support Scheme (ESS) as soon as possible.

In a Government news article and a press release both dated 20 April 2020, the Government has clarified the following:

1. after approval of the ESS application, the number of employees on payroll shall not be less than the number of employees in March 2020;
2. the wage subsidies applied by employers must be used fully for employees' wages; and
3. payment is to be disbursed in two tranches, with the first payment before end of June 2020 to subsidise employers to pay employees' wages from June to August.

Please click here for our previous update on the ESS and Catering Sector One-Off Subsidy.

Sources:

Finance Committee Meeting on 18 April 2020 

In advance of the Finance Committee meeting, a Discussion Paper FCR (2020-21)2 was published on 17 April 2020 (https://www.coronavirus.gov.hk/pdf/fund/FCR(2020-21)2e.pdf or https://www.legco.gov.hk/yr19-20/english/fc/fc/papers/f20-02e.pdf).

Enclosure D1 contains some further details on the ESS. We capture below the elements of the ESS contained in Enclosure D1 that have not yet been officially confirmed by the Government:

  • Applications for the first tranche of ESS payment will start before the end of May 2020 till the first week of June 2020.
  • Application dates for the second tranche will be announced in due course, with payment to be made in September 2020 for paying the wages of September to November 2020.
  • The employees may be engaged in full-time or part-time work as each enterprise’s circumstances differ. Should there be any reduction in the number of employees on the payroll within the MPF and the ORSO framework during the period, the ESS subsidy will be adjusted with claw back and other penalty.

Although the Finance Committee has approved the budget for the ESS, the detailed application, payment mechanisms and implementation details are still being worked out by the Government in consultation with the relevant stakeholders, including MPF trustees. These will be announced before application for the first tranche of ESS payment is invited.

You may view the first two announcements of the Employment Support Scheme published by the Hong Kong Government on 8 April and 16 April 2020 through the links below: