In response to the unprecedented challenges arising from the COVID-19 virus, the Hong Kong SAR Government announced on 8 April 2020 the second round of Anti-epidemic Fund measures which included an HK$80 billion Employment Support Scheme ("ESS").  Under the ESS, the Government will provide wage subsidies to eligible employers to retain their employees in return for employers’ undertaking not to implement redundancy.  Below are the frequently asked questions of the scheme:

Are all HK employers eligible for applying the wage subsidy under the Employment Support Scheme and are all employees qualified as headcount for wage subsidy?

HK employers who have set up MPF or ORSO scheme accounts on or after 1 April 2020 are eligible (except the HKSARG, statutory bodies and subvented staff in Government funded organisations, etc).

Employees, include full-time or part-time employees, whose MPF or ORSO scheme accounts have been set up on or before 31 March 2020 are qualified as headcount for wage subsidy.  In other words, employees with the MPF or ORSO accounts set up on or after 1 April 2020 are not be eligible.

Regular employees under the Master Trust Schemes and Industry Schemes, for whom MPF mandatory contributions have been made by their employers; and employees aged 65 or above under the Master Trust Schemes and Industry Schemes are also qualified for the wage subsidy.

What is the amount of wage subsidy?

Wage subsidy for each employer is calculated on 50% of salary at a specified month (capped at a salary of $18,000) for 6 months.  Wage subsidies will be disbursed in two tranches to employers.  The first tranche of subsidies for the months of June to August 2020 will be made in three to four weeks after application.  The second tranche of subsidies will be disbursed in September 2020.

In the first tranche, employers applying for the Scheme can nominate any one month from December 2019 to March 2020 as the “specified month”.  The amount of wage subsidies will be calculated based on 50% of the actual wages paid to each employee in the specified month.

When will the application start?

Application will start from 25 May to 14 June 2020. 

How does the ESS work?

The HKSAR will provide wage subsidies to eligible employers who undertake not to reduce the number of employees during the subsidy period, that is, the number of "Paid Employees" from June to August cannot be less than the number of "Employed Employees" in March 2020.  The wage subsidies applied by employers must be used fully for employees' wages. The unspent balance of the subsidy will be clawed back by the HKSAR.

What is the penalty for breaching the undertaking?

The Government will establish appropriate monitoring and assessment mechanisms under ESS to screen and follow up on cases involving abuse and violations. Besides, the Government will adopt a transparent approach to let the society and employees monitor, including announcing the list of employers who have received subsidies, the total number of employees benefited and the amount of subsidies. As such, employees concerned and members of the public will get to know which employers have received subsidies. Should an employer be found to have violated the conditions of ESS, employees concerned or members of the public may report to relevant authorities.  Applicants will be legally liable for making false statements.

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