Hong Kong Wage Subsidy Update – Government announces new round of Employment Support Scheme subject to new rules24Mar2022
The Hong Kong government announced on 18 March 2022 a new round of Employment Support Scheme (“ESS 2022”) in response to the “fifth-wave” of the Covid-19 pandemic in Hong Kong, and intended to target the wage subsidies at small and medium enterprises affected by the pandemic.
While full details of ESS 2022 are yet to be announced, the key details provided in the announcement are:
- Eligible employers will receive subsidies in the fixed amount of HK$8,000 for each full-time employee it employs who earns less than HK$30,000 per month. Employers will not be able to apply for subsidies in respect of employees earning more than that amount.
- The subsidy will cover the three-month period from May to July 2022. During that period, employers receiving wage subsidies will be required to continue employing at least the same number of employees in respect of whom wage subsidies are received.
- Employers will be required to use the subsidy exclusively for the payment of the relevant employee’s wages.
- Employers of more than 50 employees in sectors considered by the Government as not being affected by the pandemic will be excluded from the scope of ESS 2022. The preliminary list of excluded sectors includes (amongst others) supermarkets, pharmacies, property management companies, banks, financial institutions, insures, public utilities, estate agents, and real estate developers.
- The number of employees in respect of whom each employer may receive subsidies in ESS 2022 will be capped. The Government proposed that in respect of each employer, the number of subsidised employees will be capped at the number of employees in respect of whom the same employer received subsidies in previous rounds of ESS in 2020. The Government is also considering whether to impose a further, fixed cap on the total number of employees in respect of whom each employer may receive subsidies.
- In previous rounds of ESS, employers could generally only apply for wage subsidies in respect of employees who have been participating in Mandatory Provident Fund (MPF) or Occupational Retirement Schemes Ordinance (ORSO) schemes. The Government announced that in ESS 2022, there will be arrangements for employers to receive subsidies in respect of employees over 65, who are not required to contribute to an MPF scheme.
The Government expects that ESS 2022 will be open for applications by employers in April 2022. It is expected that further details will be announced closer to the time when application opens.
The Government announcement concerning ESS 2022 can be accessed here: https://www.news.gov.hk/eng/2022/03/20220318/20220318_121844_155.html. Please note however that some of the details set out above (including the preliminary list of excluded sectors) is only available in the Chines version of the announcement.
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Disclaimer: This publication is general in nature and is not intended to constitute legal advice. You should seek professional advice before taking any action in relation to the matters dealt with in this publication.