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Coronavirus Business Help Corner

The Government Employment Support Scheme (ESS)

Objective

To maintain employment during the epidemic by providing time limited financial support to employers to retain their employees who will otherwise be made redundant

Targeted Employers and Employees

All employers who have made Mandatory Provident Fund (MPF) contributions or set up Occupational Retirement Schemes (ORSO) on or before March 31, 2020 (i.e. no backdating to or before that date)

Exclusions

  • (1) HKSAR Government (2) Legislative Council (3) Judiciary
  • The Liaison Office of the Central People’s Government in the HKSAR, the Office of the Commissioner of the Ministry of Foreign Affairs of the People’s Republic of China in the HKSAR, the Hong Kong Garrison of the Chinese People’s Liberation Army
  • Offices of other governments and international organisations
  • Specified statutory bodies
  • Specified public organisations , government owned companies or subvented organisations
  • Fully subvented staff in government funded organisations
  • Dedicated staff working on Government contracts

ESS for self employed persons

- Self-employed persons (SEP) who have set up an active MPF account on or before March 31, 2020 (excluding backdating) and with that account remaining opened as of March 31, 2020 will be eligible

- Each eligible SEP will be granted a one-off subsidy of $7,500 on application

Level of Subsidy for employers per month

- 50% of actual wages at a “specified month”

- Wage cap: $18,000 per month (i.e. max subsidy per employee per month = $9,000)

- For MPF: “wage” refers to Relevant Income (including salary, commissions, bonuses etc.)

- For ORSO: “wage” refers to the actual amount paid by the employer

Duration of the ESS

- To support salary payment for 6 months in two tranches

  • 1st tranche: June, July and August 2020
  • 2nd tranche: September, October, November 2020

Required undertakings

- Not to implement redundancy during the subsidy period, and

- To spend all the government wage subsidies on paying wages to their employees

- Non compliance ESS subsidy will be clawed back plus additional penalty

First tranche of ESS

- Employers can choose either December 2019, January, February, or March 2020 as the specified month.

- Subsidy for the June, July and August will be calculated on the basis of the wages paid in the specified month.

- A snapshot of individual employer’s MPF contribution data for December 2019 to March 2020 was taken on May 7, 2020, which will be used for calculating wage subsidies. No changes allowed for the purpose of ESS

- Employers may only apply for wage subsidies in respect of employees for whom default mandatory contributions (excluding surcharge) have been settled on or before 7 May

- Eligible employers and self-employed persons may submit online applications between 25 May and 14 June 2020. Wage subsidies will be disbursed within 3-4 weeks in most cases

Compliance for the first tranche

In June, July and August 2020

- The number of employees on payroll (i.e. with pay) cannot be smaller than the number of employees (with or without pay) in March 2020

- All ESS received in these months should be paid to the employees

- Otherwise, Government will claw back the amount not used for paying wages, and impose a surcharge. Details to be announced next week

Arrangement of the second tranche

- ESS for September, October and November 2020 will be announced later

- Subject to the experience in the first tranche and ongoing conditions of the economy

Coverage of ESS

- About 270,000 employers who have been making MPF contributions or have set up ORSO employing 1.77 million employees, and

- About 215,000 self employed persons will be benefited.

Application

- To simplify administrative work and avoid delay or omissions during application, MPF applicants shall authorize the ESS processing agent (agent) to receive MPF records from their MPF trustees and the trustees to provide the same to the agent. Upon authorization, the trustees will send the agent the MPF records to facilitate processing and calculation of the subsidy amount

- The detailed application processes for employers with MPF schemes, ORSO schemes, a hybrid of MPF and ORSO schemes, as well as self employed persons will be announced next week


 For enquiries, please email to enquiry@employmentsupport.hk or call our hotline at 183 6122. The service hours of the hotline is from 9am to 6pm, Monday to Friday (closed on Saturday, Sunday and public holidays), and the service hours will be from 9am to 6pm, Monday to Sunday during the application period (i.e. May 25 to June 14).

Please find more information here

Posted on 2020/05/13