Hong Kong Wage Subsidy Update – Further details on Employment Support Scheme (ESS) provided in Finance Committee Discussion Paper

UPDATE 5: 12 June 2020 – Hong Kong Wage Subsidy Update 5 – Reminder: Deadline to apply for 1st tranche of Employment Support Scheme (ESS) closes on Sunday, 14 June 2020 at 23:59 HKT

UPDATE 4: 19 May 2020 – Hong Kong Wage Subsidy Update 4 –Employment Support Scheme (ESS) Application details announced

UPDATE 3: 15 May 2020 – Hong Kong Wage Subsidy Update 3 – HK Government releases further details on application process for Employment Support Scheme (ESS)

Funding approval for the second round of Anti-epidemic Fund measures announced by the Chief Executive on 8 April 2020 was given by the Finance Committee of the Legislative Council on 18 April 2020. 

The Anti-epidemic Fund measures include wage subsidies as well as a one-off subsidy for self-employed persons to be provided under an Employment Support Scheme (ESS), with an estimated total expenditure of about HK$81 billion. 

The Finance Committee Discussion Paper FCR (2020-21)2 provides more details regarding the further measures to be implemented, with details of the ESS set out in Enclosure D1 (https://www.coronavirus.gov.hk/pdf/fund/FCR(2020-21)2e.pdf).

Further details regarding the ESS as set out in the Finance Committee Discussion Paper are set out below (we have highlighted those details which were not included in the 8 April announcement):

• The aim is to maintain employment during the epidemic by providing time-limited financial support to employers to retain their employees who will otherwise be made redundant.
   
• The ESS should be used for paying wages to maintain employment for staff currently in the job.
   
• All employers who have been making MPF contributions or have set up ORSO schemes for their employees will be eligible for ESS, with the exception of certain employers on an exclusion list (the HKSAR Government, certain statutory bodies, subvented staff in government-funded organizations or staff employed by outsourced service contractors to work for Government contracts). [Three sectors i.e. construction, catering and transport, which are not well-covered by MPF, will be addressed by separate sector-specific schemes – see Enclosures D17, D20 and D23].
   
• The ESS will also cover self-employed persons who have made MPF contributions in the past 15 months.  Eligible SEPS will be granted a one-off lump sum subsidy of $7,500. [A separate press release by the Government on 20 April 2020, stated that this applied to self-employed persons “who have made contributions to the MPF from January 1, 2019 to March 31, 2020”].
   
• The amount of subsidy for eligible employers will be calculated based on 50% of the actual wages paid to employees at a specified month (being any one month from January to March 2020 to be nominated by the employer) with a wage cap at HK$18,000 per month (i.e. the maximum subsidy is HK$9,000 per month per employee) for six months.
   
• Eligible employers joining the ESS will be required to provide an undertaking not to implement redundancy during the subsidy period and to send all the government wage subsidies in paying wages to their employees. 
   
• The employees may be engaged in fulltime or part-time work as it was recognized that each employer’s circumstances differ.
   
• Should there be any reduction in the number of employees on the payroll within the MPF and ORSO framework during the period, the ESS subsidy will be adjusted with clawback and other penalties. 
   
• Payment will be made in two tranches, the first covering the period from June to August and the second from September to November 2020. 
   
• Applications for the first tranche will start before the end of May 2020 till the first week of June 2020, with the aim of making the first payout to employers within June to help pay wages for June to August 2020.
   
• Application dates for the second tranche will be announced in due course, with payment to be made in September 2020 for paying wages of September to November 2020.
   
• The detailed application and payment mechanisms are still being worked out.  The Government is liaising with MPF trustees and relevant stakeholders to work out implementation details, which will be announced before application for the first tranche is invited.  
   
• [A separate press release by the Government on 20 April 2020, stated that “After approval of the application, the number of employees on payroll shall not be less than the number of employees in March 2020 and the wage subsidies applied by employers must be used fully for employees’ wages, benefiting employees hired by the employers in the said period”.]

To contact the Tanner De Witt Employment Practice, please reach out to Kim or Russell at:

Later announcement: 15 May 2020 – Hong Kong Wage Subsidy Update 3 – HK Government releases further details on application process for Employment Support Scheme (ESS)

Earlier announcement: 9 April 2020 – Wage subsidy and employment relief announced in second round of Anti-epidemic fund

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.