Employment Support Scheme – a further HK$40Bn in pandemic relief

Employment Support Scheme – a further HK$40Bn in pandemic relief

Employment Support Scheme – a further HK$40Bn in pandemic relief 800 535 Adam Hugill
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Hong Kong’s Government is planning a new round of the Employment Support Scheme (“ESS”) which is intended to broadly replicate original ESS which operated for six months, in two tranches, from June – August 2020 and September – November 2020.

The Government first announced the 2022 Scheme in mid-March 2022. Having received some criticism that the original ESS disproportionately benefited major Hong Kong employers, which did not necessarily suffer any business downturn due to the pandemic (e.g. supermarkets and pharmacies), the Government announced a number of new provisions that would apply to the 2022 Scheme.

To ensure that businesses that were less impacted by the pandemic do not again benefit disproportionately, the 2022 Scheme now includes a “Restricted List” of employers that can only claim subsidies for their first 100 employees.

As with the original ESS, certain employers fall into an “Excluded List” and are ineligible to receive subsidies. These employers include government and statutory bodies and organisation that are publicly or government-funded.

All employers will be restricted to claiming subsidies for a maximum of 1,000 employees.

Initially the 2022 Scheme was to be targeted towards workers earning less than HK$30,000 per month. This cap has, however, been lifted and the 2022 Scheme will now apply to all employees regardless of their earnings.

In a variation to the original ESS, the 2022 Scheme provides for a fixed HK$8,000 subsidy for employees earning at least HK$8,000 per month. A fixed subsidy of HK$4,000 will be provided for employees earning between HK$3,000 – HK$8,000 per month.

Enrolment for the 2022 Scheme is due to commence in late April 2022 (final details to be confirmed) and will provide for the payment of monthly subsidies in respect of May, June and July 2022.

The Scheme will continue to be operated with reference to employers’ MPF / ORSO contributions. Employees aged 65 or above will remain eligible. (Provisions will also be made to allow self-employed individuals to benefit under the 2022 Scheme).

Employers can choose to use the ESS employee information that was provided in 2020 for reckoning headcount or it can provide headcount information for staff employed during the Q4, 2021.

While full details have not yet been published, we expect that employers will again be required to undertake not to make redundancies during the subsidy period, and to spend all the wage subsidies on paying wages to the employees. We also expect that the 2022 Scheme will incorporate the penalties that applied to the original ESS so that in the event of any redundancies during the relevant period, subsidies will need to be repaid.

 

If you would like to understand more on legal implications connected to employment and HR issues, you can contact the partner heading our Employment practice – Adam Hugill.

This article is for information purposes only.  Its contents do not constitute legal advice and readers should not regard this article as a substitute for detailed advice in individual instances.

Adam Hugill

Adam advises on a wide range of contentious and non-contentious legal and commercial issues, with a special emphasis on employment law in Hong Kong and the Asia Pacific region.

All articles by : Adam Hugill
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