Application for Hong Kong’s Employment Support Scheme to open on 29 April

On 25 April 2022, the Government announced that applications for the latest round of the Employment Support Scheme (ESS) can be made between 29 April 2022 and 12 May 2022 (both dates inclusive). Employers intending to apply should complete and submit an online application form and upload the necessary documents. More details can be found here.

A summary of the terms of the latest round of the ESS are set out below.

Eligibility

Eligible employers must:

• not be an employer listed in Part I of the Exclusion List, which include, amongst others, the Government, the Legislative Council, the Judiciary, offices of other governments and international organisations, certain specified statutory bodies and corporations and certain specified public organisations, government-owned companies or subvented organisations;
• have participated in a mandatory provident fund (MPF) scheme or have set up a scheme under the Occupational Retirement Schemes Ordinance (ORSO) on or before 31 December 2021;
• have not been involved in any winding up, deregistration or striking off process and have not become dormant; and
• have fully settled all clawback or penalty in relation to the 2020 ESS (if any) on or before 10 May 2022.

Wage subsidies

Employers whose applications had been successfully approved in the 2020 ESS shall specify the records they intend to use by the Government-appointed agent to calculate the wage subsidies. Other applicants shall use their records as at Q4 2021 as the calculation basis.

Where employers choose to use the Q4 2021 records, they may select a month between October and December 2021 to be the reference month. This will however result in a delay of approximately 2 to 3 weeks in receiving the subsidies.

The below table summarises the different categories of subsidies for which eligible employers may apply in respect of each relevant month and the conditions which they are required to meet for each category:

Employers on the Restricted List² will be subject to a Sector-Specific Cap of 100 employees. Other eligible employers will be subject to a Sector-Specific Cap of 1,000 employees.

Employers’ undertakings and penalty

When applying for the wage subsidies, employers are required to undertake that:

(1) the number of employees with a monthly wage of HKD8,000 or above is no less than the chosen Full Subsidy Headcount;

(2) having fulfilled the headcount requirement in (1), the number of remaining employees with a monthly wage of HKD4,000 or above is no less than the chosen Half Subsidy Headcount;

(3) the number of employees aged 65 or above with a monthly wage of HKD4,000 or above is no less than the chosen Elderly Subsidy Headcount; and

(4) the number of employees with a monthly wage of HKD4,000 or above is no less than the Chosen Subsidised Headcount.

Where employers are unable to meet the above-mentioned undertakings, they will be required to return the relevant subsidy amount plus a penalty of 10% of such amount.

The Government is expected to conduct checks on whether successful applicants have complied with the above undertakings by reviewing the MPF records (for employers participating in MPF schemes) or information on actual wages paid and wage records (for employers who have set up ORSO schemes) of the subsidy period.

Disbursement of subsidies

The subsidies will be disbursed in 4 tranches, as follows:

• 1st tranche: 100% of subsidies of May 2022
• 2nd tranche: 100% of subsidies of June 2022
• 3rd tranche: 70% of subsidies of July 2022
• 4th tranche: 30% of subsidies of July 2022 after deducting subsidies to be returned to the Government and penalties to be paid (if any)

Please contact Helen Colquhoun or Wendy Wong if you have any questions.