Hong Kong Wage Subsidy Update – Government announces new round of Employment Support Scheme
The Government has at last finalized the details of the new round of Employment Support Scheme ("2022 ESS"). The purpose of the 2022 ESS to offer limited time financial support to small and medium-sized enterprises through providing wage subsidies to encourage enterprises to increase employment and to retain employees who would otherwise be made redundant.
The details of the 2022 ESS are as follows:
1. Eligible Applicants
Employers
All employers who :-
- Are not an employer listed in Part I of the Exclusion List (see below);
- have participated in MPF Schemes or set up ORSO Schemes on or before 31 December 2021;
- have not been involved in winding up, deregistration or striking off process or has not become dormant; and
- Have fully settled all clawback/penalty of 2020 Employment Support Scheme (if any) on or before 10 May 2022.
The "Exclusion List" includes government and statutory bodies, public institutions, government-funded organizations and government outsourced contractors including hotels dedicated for isolation or quarantine purposes.
Self-Employed Persons
Self-employed persons who have successfully created an MPF "Self-Employed Person" account on or before 31 December 2021 and have not terminated such account at the time of application are also eligible for the 2022 ESS.
2. Amount of Subsidy
Employers
Eligible employers will receive:
- Subsidy of HK$8,000 per full-time employee earning a monthly income of HK$8,000 or more;
- Subsidy of HK$4,000 per employee earning a monthly income between HK$3,000 to HK$8,000; or
- Subsidy of HK$4,000 per employee aged 65 or above earning a monthly income less than HK$3,000
Note: the salary cap of HK$30,000 announced by the Government earlier has been removed
Self-Employed Persons
Self-employed persons will receive a one-off subsidy of $8,000.
3. Number of Subsidized Employees
The number of employees eligible for subsidy is determined either:
- using the number of employees the employer received subsidy under the 2020 ESS; or
- the actual number of employees hired during the fourth quarter of 2021.
Employers electing the latter calculation method will experience a longer processing time for the application.
Employers are generally entitled to subsidy up to a maximum of 1000 employees, unless they fall within the "Restricted List", in which case, they will only receive subsidy up to a maximum of 100 employees.
Employers falling within the "Restricted List" are those considered as being less affected by the fifth wave of COVID-19 pandemic, which include supermarkets and convenience stores, pharmacies and medicine companies, business-to-consumer e-commerce platforms (including retail product, food and beverage takeaway, vehicle booking), property management, cleaning and security services companies, insurance, banking, securities, MPF, asset management, custody and trust businesses, local courier and delivery services, public utility companies, theme parks, private hospital, medical group practices and medical laboratories, principal contractors of construction industry, property and real estate development business, real estate agencies, and human resources outsourcing agencies.
The full Restricted List and description of each industry can be accessed here.
4. Subsidy Period
The subsidy will cover the three-month period from May 2022 to July 2022.
5. Employers' Undertakings
Employers are required to use the full amount of wage subsidies received exclusively for the payment of the relevant employee's wages.
During the three-month period from May 2022 to July 2022, employers receiving wage subsidies are required to continue employing at least the same number of employees in respect of whom wage subsidies are received.
The Government will check the records of MPF Schemes or ORSO Schemes to ensure compliance with these obligations.
Employers who fail to comply with these obligations will have to return the subsidy received for each missing employee plus an additional 10% penalty fee.
6. Application Period
The Government will be inviting applications starting 8:00 a.m. this Friday, 29 April 2022 over a two-week period until 11:59 p.m. on Thursday, 12 May 2022.
Applicants will have to submit their applications online and upload all necessary supporting documents (regardless of whether an application for 2020 ESS was made before).
Subsidies will be paid in four tranches:
- 1st tranche consists of 100% of the subsidies for May 2022;
- 2nd tranche consists of 100% of the subsidies for June 2022;
- 3rd tranche consists of 70% of the subsidies for July 2022; and
- 4th tranche consists of 30% of the subsidies for July 2022 after deducting subsidies to be returned to the Government and penalties (if payable).
The first batch of subsidies is expected to roll out in early May 2022.
The webpage dedicated to the 2022 ESS can be accessed here.
Our team at RPC are widely recognized as leading employment lawyers in Hong Kong. We are of the few specialist employment law practices in Hong Kong and we act for both employers and employees on contentious and non-contentious matters.
Please do not hesitate to contact our Partner and Head of the Employment Practice in Hong Kong, Andrea Randall (andrea.randall@rpc.com.hk / +852 2216 7208) for any queries regarding the issues raised in this article or any employment law related queries you may have.
All material contained in this article is provided for general information purposes only and should not be construed as legal, accounting, financial or tax advice, or as opinion to any person or specific case. RPC accepts no responsibility for any loss or damage arising directly or indirectly from action taken, or not taken, which may arise from reliance on information contained in this article. You are urged to seek legal advice concerning your own situation and any specific legal question that you may have.