Employment Support Scheme - Overview for Employers

Second subsidy instalment application opens 31 August

The Hong Kong Government has announced the application details for the second instalment of its Employment Support Scheme (ESS). Eligible employers may submit their applications for the second tranche wage subsidies from 31 August to 13 September 2020. Employers who have previously applied for the first tranche of the wage subsidies (for wages paid from June to August 2020) must submit a new application (whether the first application was successful or not).

Background

The ESS is part of the Government’s second round of Anti-epidemic Fund measures to help businesses stay afloat and keep workers in employment. All employers who have been making Mandatory Provident Fund (MPF) contributions or have set up Occupational Retirement Schemes (ORSO schemes) for employees are eligible.

Under the ESS, eligible employers can received a subsidy 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 HKD18,000 per month (i.e. the maximum subsidy is HKD9,000 per month per employee) for six months.

Employers who have been participating in Mandatory Provident Fund (MPF) and/or who have set up MPF-exempted ORSO schemes prior to 31 March 2020 may apply for the second tranche of wage subsidies of up to HKD9,000 per employee per month which can subsidise their payment of the employee’s wages the periods June to August, and September to November 2020. 

Second tranche application

The eligibility, related obligations and information required for the second tranche application is essentially the same as for the first tranche, however some of the required information details could be different according to the current circumstances, for example the choice of the specified month. Furthermore, the receiving bank account details provided in the first tranche application cannot be changed when making the second tranche online application. Should an applicant employer wish to change the receiving bank account details, a separate application to do this must be made via the Employment Support Scheme Application Service Portal. 

Eligibility

All employers who have been participating in MPF or ORSO schemes will be eligible to apply for wage subsidies in respect of the following categories of employees:

• Regular employees (between the age of 18-65 and have been employed for a continuous period of 60 days or more)
• Employees aged 65 or above

Employers cannot apply for wage subsidies in respect of casual employees (between the age of 18-65 employed in the construction industry or the catering industry on a day-to-day basis, or for a fixed period of less than 60 days).

Employers not eligible for ESS include the HKSAR government and offices of other governments and international organisations, statutory bodies and corporations as well as public organisations, government-owned companies or subvented organisations. Also, those self-employed persons and those employers who have applied for an industry-specific subsidy scheme are not eligible under the ESS, i.e. a licence holder who has submitted application for the Catering Business (Social Distancing) Subsidy Scheme in respect of the licensed premises covered by the relevant business registration certificate (including applications being processed or approved) is not eligible.

In order to be eligible, the MPF or ORSO accounts of employers and employees should have been set up on or before 31 March 2020.

Obligations

Eligible employers participating in ESS will be required to provide an undertaking –

• not to make redundancies during the subsidy period (therefore the number of employees must remain the same during the subsidy period); and
• to spend all the wage subsidies on paying wages to the employees.

Information required

1. Business Registration Number
2. Name of the MPF Trustee
3. Name of the MPF Scheme
4. Number of eligible employees
5. Actual wage of each employee in the specified month (any one month between December 2019 and March 2020)
6. A bank statement of the employer making the contributions (the bank account name will need to match the employer name)

Timeline

First tranche

Online applications for the first tranche of subsidies were to be made between 25 May to 14 June 2020. Most employers who have been making MPF contributions received the wage subsidy within three to four weeks after application, to subsidise their payment of staff wages from June to August 2020. 

Second tranche

Applications for the second tranche wage subsidies can be made from 31 August to 13 September 2020 only. It is expected that most eligible employers who have provided accurate and complete information will receive the wage subsidies in three to four weeks after application. For applications involving ORSO schemes a longer processing time may be required.

Where an employer has breached their undertaking during the first subsidy period and is required to return the unspent balance of the subsidy and/or pay a penalty to the Government, the employer can expect a longer processing time for their applications for the second tranche subsidies.

For such in-breach employers, if their applications for the second tranche are approved, the Government will deduct the relevant penalty amount directly from the second tranche of subsidies paid out to those employers.

For employers who have applied for the first instalment of wage subsidies (regardless of whether the application is successful or not), if they intend to apply for the second instalment of wage subsidy, the application must be resubmitted.

For further details see the ESS website.

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