*Since the publication of this article, Chief Executive Carrie Lam has made further comments on the Employment Support Scheme. Details of the update are highlighted in italics.
On 8 April 2020, the Government announced a HK$137.5 billion package of relief measures in face of the COVID-19 epidemic, which is the second round of Anti-epidemic Fund measures. This includes an HK$80 billion Employment Support Scheme (ESS) to help employers retain employees and avoid redundancies.
This article covers some details of the ESS based on recent remarks by government officials, and information on other sector-specific measures under the Anti-epidemic Fund.
How will the ESS work?
Based on the announcement made by the Chief Executive and comments by other government officials including the Chief Secretary for Administration, the Financial Secretary and the Secretary for Labour and Welfare, the salient features of the ESS are as follows:
- The Government will provide a wage subsidy to eligible employers to retain employees and avoid redundancy. All employers who have been making MPF contributions for employees [Note: eligible employers include those who have set up an occupational retirement scheme for their employees] (except for government employees and employees of statutory bodies and subvented organisations) are eligible.
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The amount of the subsidy will be based on 50% of the monthly wages of the employee capped at HK$18,000, meaning a maximum subsidy of HK$9,000 per month. The subsidy will be for a period of six months.
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Employers may apply for the subsidy in early June 2020 and select a month between January and April 2020 [Note: instead of April as previously alluded to by the government officials, an employer may select the amount of wages paid to its employees in a month between January and March 2020] as a basis to calculate their payroll.
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An eligible employer will have to give an undertaking that they cannot implement redundancy [Note: this means that the number of employees on the payroll in the subsidy period cannot be smaller than the number of employees in March 2020].
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The government will focus on monitoring the headcount of participating employers, rather than checking on each and every individual employee.
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The ESS allows employers to retain flexibility over how they handle their human resources policy. As the target of the ESS is job retention, the subsidy will not prevent employers from reducing their employees' salary or requesting employees to take unpaid leave.
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The entire government subsidy must be utilized towards paying staff salaries and not any other purposes.
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Employers who successfully apply for the subsidy and the amounts they receive will be identified to the public as well as to the employees concerned.
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Self-employed persons who contribute to the MPF will receive a one-off subsidy [Note: this will apply to those who have made contributions to the MPF in the past 15 months. The amount of subsidy is HK$7,500].
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The details of the ESS are still being worked out. They may be presented for approval at the Finance Committee of the Legislative Council as soon as Friday 17 April.
What other measures are available under the second round of the Anti-epidemic Fund?
In addition to the ESS, the government has announced a number of proposals to cover various sectors in Hong Kong, focusing on job creation, job advancement and provision of other forms of financial relief. Details of such measures are as follows:
| Target Industries / Sectors |
Subsidy |
| Employment-related subsidies in all public and private sectors
|
- HK$6 billion to create around 30,000 fixed-term jobs of up to 12 months in the coming two years for people with different skill sets and academic qualifications, ranging from professionals and technicians to grassroots workers.
- Matching grants of up to HK$100 million for training programmes for employees.
|
| Real estate sector |
- A one-off cash subsidy to licensed individuals in the estate agency sector, equivalent to the 24-month licence fee of the relevant licences.
- Rental and fee concessions for certain government premises, from 50%-75% from April to September 2020, and other waivers of fees, to be implemented either administratively or by way of subsidiary legislation.
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| Banking and Finance sector |
- A one-off relief grant to Category B and Category C exchange participants (i.e. brokers ranked 15th onwards by market turnover) and Securities and Futures Commission licensed individuals of HK$50,000 and HK$2,000 respectively.
- Enhancements to the 80%, 90% and Special 100% Guarantee Products under the SME Financing Guarantee Scheme will be available. HKMC Insurance Limited will liaise with banks on implementation details.
- The Hong Kong Monetary Authority has worked with the banking industry to implement a number of measures that address the pressure on clients’ (especially SMEs) cash flow.
|
| Education sector |
- A one-off relief grant of HK$40,000 to tutorial schools, i.e. private schools offering a non-formal curriculum registered under the Education Ordinance.
- A one-off relief grant of varying amounts to service providers and suppliers for schools and post-secondary education institutions, for example to catering outlets, lunchbox providers, school bus drivers and nannies, instructors, coaches, trainers and operators of interest classes engaged by schools.
- One-off relief grants also available to registered coaches under the National Sports Associations and Sports Organisations, and instructors of interest classes for organisations subvented by the Social Welfare Department.
- One-off interest-free deferral of loan repayments for two years to self-financing post-secondary institutions under the Start-up Loan Scheme, non-profit-making international schools and students receiving loans from the Working Family and Student Financial Assistance Agency.
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| Aviation sector |
- One-off subsidies of HK$1 million and HK$200,000 per large and small aircraft registered in Hong Kong respectively.
- A one-off subsidy of up to HK$3 million to each aviation support services and cargo facilities operator, depending on the number of employees of such operator.
- Airport Authority to budget HK$2 billion for further relief measures.
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| Transport sector |
- MTR Corporation Limited ("MTRC") to provide a 20% fare reduction for six months between 1 July 2020 to 1 January 2021, with the Government to provide financial assistance to the MTRC on a 50:50 matching basis.
- Reimbursement of 100% of actual regular repair and maintenance costs and insurance premiums for six months for the five franchised bus companies, nine franchised/licensed ferry operators and Hong Kong Tramways Limited.
- Other cash subsidies to taxis, red minibus drivers and registered owners of non-franchised buses, school private light buses and hire cars.
- Monthly public transport expense threshold of the Public Transport Fare Subsidy Scheme relaxed from HK$400 to HK$200 for six months between July 2020 and December 2020.
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| Hotels and tourism sector |
- A cash subsidy of HK$300,000 - HK$400,000 for each licensed hotel.
- Subsidies available for licensed travel agents, travel agents' staff and tourist guides, coach drivers and cruise lines.
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| Construction sector |
- Training subsidies for employees, of HK$50,000 per company to be provided to some 600 consulting firms through the Construction Industry Council.
- Cash subsidies from HK$7,500-$20,000 for eligible Registered Construction Workers, contractors, specialist contractors and suppliers, company members of major construction-related trade associations and other registered contractors under relevant ordinances.
- Flexible handling of government works, non-works contracts and other development projects encouraged and for procuring departments to compress and shorten payment cycles.
See also the legal update on Covid-19 – Government Support for Construction Sector in Hong Kong.
|
| Insurance sector |
- The Insurance Authority and industry stakeholders rolled out a package of relief measures, where all major insurance companies have proactively offered grace periods for premium payments of up to 30 to 180 days for holders of individual life, critical illness and medical policies. Policyholders should contact their insurance companies or intermediaries to apply for deferment of premium payments.
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| Catering sector |
- One-off subsidies ranging from HK$250,000 to HK$2.2 million to eligible catering outlets based on the size of the premises. The subsidies are to be disbursed in two tranches. Not less than 80% of the subsidy must be used to pay employees' salaries. A licensee is required to undertake that they will not make any staff redundant in the three months after obtaining the subsidy and will not apply for further subsidy under the ESS.
- Each eligible catering outlet directed by the government to close the whole of its licensed premises is eligible for a further one-off subsidy of HK$50,000.
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| Healthcare industry |
- Registration/enrolment fees for some 125,000 healthcare professionals waived for three years starting from July 2020 as a recognition of their contribution in the fight against the epidemic.
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| Legal industry |
- LAWTECH Fund to assist SME law firms and barristers' chambers to procure or upgrade IT systems and provide training to staff for the development of remote hearings.
- COVID-19 Online Dispute Resolution (ODR) Scheme to provide ODR services for disputes related to or arising out of COVID 19.
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Innovation and Technology industry
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- A Distance Business Programme under the Innovation and Technology Bureau of about HK$500 million to support enterprises in adopting technology to continue business with technology adoption and related training for employees.
- Encouraging development of 5G by subsidising 50% of the costs for 5G-related projects, subject to a cap of HK$500,000 for each project.
|
| Others |
- One-off subsidies from HK$20,000 to HK$100,000 are also available to sectors completely or partly closed due to measures for safeguarding public health imposed by the Government.
- One-off relief grant of HK$8,000 to each private refuse collector.
- One-off relief grant of HK$10,000 to each local primary producer.
- Subsidy to the creative industries including the Cinema Subsidy Scheme.
- Subsidy to non-profit-making organisations running certain specific projects.
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Similar to the ESS, details of how to apply for such subsidies have not yet been released and are subject to further details to be provided by the Government.
More details of the above measures can be found here:
https://www.coronavirus.gov.hk/pdf/fund/20200408_supplementary_information_en.pdf
https://www.info.gov.hk/gia/general/202004/08/P2020040800810.htm
https://www.info.gov.hk/gia/general/202004/09/P2020040900021.htm
https://www.info.gov.hk/gia/general/202004/09/P2020040900392.htm
https://www.info.gov.hk/gia/general/202004/11/P2020041100293.htm
