Hong Kong Employment Support Scheme

The Hong Kong government announced the second round of Anti-Epidemic Fund measures on 8 April 2020, which included an HK$80 billion (US$10 billion) Employment Support Scheme (ESS) to help employers retain employees and avoid redundancies. The Finance Committee of the Legislative Council gave funding approval on 18 April and applications can be made now and we can help you do it.

The ESS will provide a wage subsidy to eligible employers to retain employees, as follows:

  • Eligibility – all employers who have been making Mandatory Provident Fund (MPF) contributions for employees (except for government employees or employees of statutory bodies and subvented organisations) or have set up Occupational Retirement Schemes (ORSO schemes) for their employees. The employees may be engaged in full-time or part-time work.
  • Amount – The amount of the subsidy will be based on 50% of the monthly wages of the employee capped at HK$18,000, offering a maximum subsidy of HK$9,000 per month.
  • Duration – Six months.
  • Form of payment of the subsidy – It will be paid to eligible employers in two payments. The first round of applications will be released in May 2020, with payments to be made by the end of June 2020 for the first tranche, for employers to pay wages from June to August. The second tranche will be released in September 2020 to cover the three months from September to November 2020.

Employers will be expected to distribute 100% of the subsidies they are given to their employees and are prohibited from using it to offset other company expenses. The government has stated it will publish the details of all companies that are granted the subsidy to ensure that employees are aware that their employer has applied for the scheme, and are therefore entitled to their subsidy payments.

Participating employers will be required to provide an undertaking not to implement redundancies during the subsidy period. If there is a reduction in the number of employees on the payroll within the MPF and/or ORSO framework during the subsidy period, the ESS subsidy will be adjusted with claw backs and other penalties. If employers are found trying to terminate staff after receiving the subsidy, or trying to provide the subsidy to non-employees (i.e. by putting friends or relatives on their payroll), this will be treated as fraud and would induce criminal liabilities.

The government will also grant a one-off subsidy to self-employed persons who have made contributions to the MPF in the past 15 months. They will be granted a one-off lump-sum subsidy of HKD7,500.

For further information or assistance with an application under the ESS scheme, please don’t hesitate to contact us at hk@SovereignGroup.com or call +852 2542 1177.

Click here for Employment Support Scheme FAQs

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