On 8 April 2020, the Hong Kong government announced a HKD 137.5 billion relief package to help the Hong Kong economy as a response to COVID-19. This package will also launch the Employment Support Scheme (“ESS”), which is estimated to cover 260,000 Hong Kong employers and over 1.5 million employees. While details were not initially released, the Hong Kong government provided greater clarity on this scheme on 18 May 2020 and how ESS will help employers retain their employees who would otherwise be made redundant. In this article, we will outline the details of ESS.
The Hong Kong government will, through the Hong Kong employers, cover 50% of employees’ salaries for six months in two tranches. The subsidy for each Hong Kong employee will be capped at HKD 9,000.
The amount of subsidy an applicant can receive will be calculated in accordance with the employee’s monthly salary specified by the Hong Kong employer.
Tranche 1 will assist employers in paying their employees wages from June 2020 to August 2020.
If a company is receiving support under ESS, they are required to adhere to the following undertakings or risk liable penalties.
The number of employees of a Hong Kong company that is on payroll cannot currently be smaller than the company’s number of employees (with or without pay) in March 2020
Hong Kong employers can apply for an ESS subsidy in either Tranche 1 or Tranche 2. At the time of writing, the details for Tranche 2’s application deadlines have yet to be released.
Employers with MPF Schemes
Employers with MPF-exempted ORSO Schemes
When submitting an online application, MPF applicants shall authorize:
Once an applicant’s authorization regarding the above has been received, the MPF trustees will send their MPF record certificates to the ESS processing agent to facilitate the processing of the application, and calculation of the subsidy amount
To the extent that a company fails to comply with the terms of ESS, they may be liable to various penalties.
Penalty percentages are calculated as follows.
Hong Kong employers who receive subsidies will need to comply with auditing and monitoring rules whereby ESS officials will ensure that Hong Kong employers have not abused or violated the conditions of ESS
During and after the application vetting process, the ESS Secretariat / processing agent will:
The FastLane Group is dedicated to helping SMEs in all aspects. Not only do we regularly provide updates / insights on the developments that affect the SME community, but we can also provide assistance on applying to ESS and other government support schemes such as the Distance Business Programme.
Please contact the FastLane Group for assistance in your accounting, auditing, HR and company secretarial matters!
This article originated on https://fastlanepro.hk/employment-support-scheme/