2022年4月28日

Employment Support Scheme 2022 Applications Will Begin Tomorrow

Authors:

The government will take applications for the 2022 Employment Support Scheme (ESS) from tomorrow (29 April 2022) until 12 May 2022.

The key features of the 2022 ESS are as follows:

Employer eligibility: All employers, except those on an "Exclusion List", who have been making Mandatory Provident Fund (MPF) contributions or have set up Occupational Retirement Schemes for their employees on or before 31 December 2021 will be eligible for the subsidy. So, a newly set up company in 2022 will be ineligible for the subsidy because they will not have a 2021 MPF account.

The "Exclusion List" includes government and statutory bodies, public institutions, government-funded organisations and government outsourced contractors including hotels used for isolation or quarantine purposes. For clarity, government-funded organisations and government outsourced contractors/consultants including hotels used for isolation or quarantine purposes will able to apply for the subsidy only in respect of employees whose wages are not fully funded by the government.

Further, to be eligible for the subsidy, employers must have fully settled all outstanding clawback or penalty under the 2020 Employment Support Scheme on or before 10 May 2022. Employers involved in any winding up, deregistration or striking off process or have become dormant are ineligible.
Subsidy period: The subsidy will apply for three months from May 2022 to July 2022.
Payment of the subsidy: The subsidy will be paid to the Eligible Employer.
Amount of subsidy: Each Eligible Employer may claim a subsidy for employees (including those aged 65 or above and whether full time or part time and casual employees in the catering and construction industries) with an existing active MPF account at the end of 2021.

There will be a three-tier subsidy (instead of a two-tier subsidy, as previously envisaged):
- fixed amount of HK$8,000 per month for each employee with a monthly wage of at least HK$8,000 ("full subsidy");
- fixed amount of HK$4,000 per month for each employee with a monthly wage of at least HK$3,000 but less than HK$8,000 ("half subsidy"); and
- fixed amount of HK$4,000 per month for each employee aged 65 or above with a monthly wage of less than HK$3,000 ("elderly subsidy"). Note: Employers will need to pay the full subsidy of HK$4,000 to the employee even though his/her wage is less than HK$3,000 per month. If they do not, then the claw back arrangement and penalties as detailed below will apply.
Self-employed persons with an active MPF account at the end of 2021 will be granted a one-off subsidy of HK$8,000.
Number of subsidised employees: Employers can elect to use (a) the number of employees for which they received a subsidy under the 2020 ESS or (b) the employer's actual headcount during the fourth quarter of 2021 ("Subsidised Employees"). Employers who opt for (b) should expect a longer processing time for the application.

For employers who elect to use the employer's actual headcount during the fourth quarter of 2021 as the reference month, the ESS will only consider MPF contribution records or ORSO schemes set up on or before 28 February 2022. In other words, contributions for the fourth quarter of 2021 made on or after 1 March 2022 will not be taken into account in the calculation.

The number of Subsidised Employees in each subsidy month may vary. Employers may change the number of Subsidised Employees in June and July 2022 in the first two weeks of those months. For example, if an employee resigns in early-May 2022 serving one month's notice and the employer foresees that it may not be able to find a replacement in June 2022 or the total wages of the departing employee is less than the relevant subsidy in June 2022, then the employer should change the number of Subsidised Employees to avoid any clawback or penalties, as detailed below.

The number of Subsidised Employees is capped at 1,000 per employer save for those employers on the "Restricted List" (see below), where the cap is 100 employees. The stated reason for the cap is that the ESS is intended to support small-and-medium sized enterprises.

Employers on the "Restricted List" are those in industries that the government considers less affected by the fifth wave of the COVID-19 outbreak and includes 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, asset management businesses, local courier and delivery services, public utility companies, theme parks, private hospital and medical groups, principal contractors of construction industry, property and real estate development business, real estate agencies and human resources outsourcing agencies.

The "Restricted List" will only apply if the employer's "core business" falls under the list. So, employers with more than one line of business will not fall into the "Restricted List" unless their core business belongs to those sectors on the list. Generally speaking, an employer's core business should be the scope of business in which it has hired the most number of employees. If the number of employees are comparable, then the employer may also consider declaring the business segments having the greatest revenue contribution as its core business. An employer should not declare more than one core business, and may be required to justify the declared core business and provide supporting documents.
Obligations of an employer: An Eligible Employer who claims the subsidy must employ no fewer than the relevant number of Subsidised Employees in each subsidy month. It must also ensure that salaries of the Subsidised Employees are not less than HK$4,000 or HK$8,000 as the case may be.

The government will check records of MPF contributions to ensure compliance with the 2022 ESS obligations. Non-compliance will result in clawback of subsidies and financial penalties.
Clawback arrangement and penalties: The clawback arrangement and penalties are different from those in the 2020 ESS.

If an Eligible Employer fails to fulfil the undertaking to employ no less than the relevant number of Subsidised Employee each subsidy month, with the relevant wage, then it must return the relevant subsidy amount and also pay a penalty equivalent to 10 percent of the subsidy amount to be returned. Notably, the amount to be returned is the full amount (i.e., either HK$4,000 or HK$8,000), and not just the difference in the amount of subsidy and the actual monthly wage.

If, after an application has been approved, the government discovers that the employer was in the process of being wound up, deregistered or struck off or was dormant, it may require the employer to return any part of the subsidies already paid.
Application and payment: The application period will be open from 29 April 2022 to 12 May 2022.

The subsidy will be provided in four tranches: (1) the first tranche covers the May 2022 subsidies; (2) the second tranche covers the June 2022 subsidies; (3) the third tranche covers 70 percent of the July 2022 subsidies; and (4) the fourth tranche covers the remaining 30 percent of the July 2022 subsidies after deducting subsidies to be returned to the government and penalties to be paid (if any).