providing a one-off subsidy of HK$7,500 to each self-employed person with a  Mandatory Provident Fund (“MPF”) account. The Hong Kong Government has implemented monitoring mechanisms to ensure that employers comply with the restrictions. The ESS is available for the following full-time and part-time employees:[2]. It is not a full analysis of the matters presented, may not be relied upon as legal advice, and does not purport to represent the views of our clients or the Firm. Employers can choose any month during the relevant period as the “specified month”. Applicants will not implement redundancy plans during the subsidy period, Applicants must spend all the government wage subsidies on paying wages to their employees, contributions, or have set up Occupational Retirement Schemes (“ORSO”), regardless of industries, are eligible to apply, Hong Kong employers must have had their MPF or ORSO accounts set up on or before 31 March 2020, Self-employed persons who have set up an active MPF account on or before 31 March 2020 are eligible to apply, The number of employees of a Hong Kong company that is on, cannot currently be smaller than the company’s number of employees (with or without pay) in March 2020. in either Tranche 1 or Tranche 2. Eligible employers can apply for wage subsidies for the applicable employees (i.e. Cookie Policy. Similarly, if an employee resigns after 31 March 2020, the employer will remain eligible to participate in the ESS provided that their headcount is no less than in March 2020. Employment Support Scheme: Wage Subsidy Application Period Start May 25 Under the Employment Support Scheme (ESS) of HK$81 billion, the government will provide financial support to employers to retain their employees in order to maintain the strength in Hong Kong economy. Eligible self-employed people who did not receive the $7,500 one-off lump-sum subsidy under the ESS’ first tranche can also apply in the same period. Global Employer Services Newsletter August 2020. When can employers expect subsidies to be paid and how is payment made? When submitting an online application, MPF applicants shall authorize: Once an applicant’s authorization regarding the above has been received, the MPF trustees will send their MPF record certificates to the ESS processing agent to facilitate the processing of the application, and calculation of the subsidy amount. Employers are required to give an undertaking that they will use the wage subsidies entirely on the payment of their employee’s wages. Be in touch with the latest news of Accounting and Finance. Introduction to the Employment Support Scheme Following in the footsteps of governments around the world, Hong Kong is planning to launch its own wage subsidy scheme similar to Singapore’s Job Support Scheme. No attorney-client relationship will exist between you or your business and O’Melveny or any of its attorneys unless conflicts have been cleared, our management has given its approval, and an engagement letter has been signed. This includes a … For example, the Hong Kong Government has warned employers against replacing employees with friends or family members to satisfy the headcount requirement. The subsidy for each Hong Kong employee will be capped at HKD 9,000. Applicants cannot make amendments to the application once submitted but they can can email the ESS Secretariat regarding the application (e.g. reducing headcount below the number employed in March 2020), the employer will be subject to a penalty. People wear masks in Hong Kong’s Causeway Bay. Employers who have set up ORSO schemes can apply for wage subsidies in respect of employees who are members of these schemes and who are Hong Kong identity card holders. Subsidy Scheme for Employment Agencies to be introduced under Anti-epidemic Fund. The subsidy is capped at HK$9,000 per month for each eligible employee for a period of six months (i.e. ... Fund measures include wage subsidies as well as a one-off subsidy for self-employed persons to be provided under an Employment Support Scheme (ESS), with an estimated total expenditure of about HK$81 billion. Room 1405 Not only do we regularly provide updates / insights on the developments that affect the SME community, but we can also provide assistance on applying to, and other government support schemes such as the. For employees aged 65 or above: Eligible employers applying for the ESS are required to provide an undertaking not to implement redundancies. The government’s dedicated website has been updated and now includes an expanded set of FAQs in … Hong Kong employers can apply for an ESS subsidy in either Tranche 1 or Tranche 2. List of Employers with Approved Wage Subsidy in the Second Tranche [updated on 17 Dec 2020] Company Name Starting from A - D. Company Name Starting from E - H. Company Name Starting from I - M. Company Name Starting from N - S. Company Name Starting from T - Z and 0 - 9. Employers who have been making contributions to their employees’ MPF accounts or an ORSO Scheme on or before 31 March 2020 are eligible to participate in the first tranche of subsidies under the ESS.[1]. Please direct all inquiries regarding New York’s Rules of Professional Conduct to O’Melveny & Myers LLP, Times Square Tower, 7 Times Square, New York, NY, 10036, T: +1 212 326 2000. Can employers terminate employees? UPDATE 3: 15 May 2020 – Hong Kong Wage Subsidy Update 3 – HK Government releases further details on application process for Employment Support Scheme (ESS) Funding approval for the second round of Anti-epidemic Fund measures announced by the Chief Executive on 8 April 2020 was given by the Finance Committee of the Legislative Council on 18 April 2020. The subsidy will last for a period of 6 months, from June to November 2020 with payments made in two tranches (the first pay-out is expected to be in June 2020). The Hong Kong Government has issued further clarifications on its relief measures today, 16 April 2020, contained in a report titled "HKSAR Government's package of measures to support individuals and businesses affected by COVID-19" ().Of the many subsidies introduced, only two specific subsidies (as reported previously) have a requirement on employers to undertake not to implement redundancies. 8. Following on from our previous alert, on 18 August 2020 the Hong Kong government announced details surrounding the second tranche of the Employment Support Scheme (the “Scheme”).Applications for the second tranche will be open from 31 August to 13 September 2020. On 8 April 2020, the Hong Kong government announced a HKD 137.5 billion relief package to help the Hong Kong economy as a response to COVID-19. At the time of writing, the details for Tranche 2’s application deadlines have yet to be released. If a company is receiving support under ESS, they are required to adhere to the following undertakings or risk liable penalties. Airport Authority to budget HK$2 billion for further relief measures. What is the subsidy amount and how it is calculated? If an employer receives subsidies and fails to comply with the undertaking not to implement redundancies (i.e. Applications for the first tranche of wage subsidies should be submitted via the ESS Online Portal (https://application.ess.gov.hk/en/apply) by 11:59pm (Hong Kong time) on 14 June 2020. Not only do we regularly provide updates / insights on the developments that affect the SME community, but we can also provide assistance on applying to ESS and other government support schemes such as the Distance Business Programme. agreeing to our Further clarifications have been announced by the Hong Kong SAR Government as employers start submitting the new subsidy scheme applications on 25 May 2020 Hong Kong employers who receive subsidies will need to comply with auditing and monitoring rules whereby ESS officials will ensure that Hong Kong employers have not abused or violated the conditions of ESS. The six-month wage-subsidy scheme has been regarded as a financial lifeline for employers across sectors to retain employees, with the latest tranche covering a … While details were not initially released, the Hong Kong government provided greater clarity on this scheme on 18 May 2020 and how ESS will help employers retain their employees who would otherwise be made redundant. 3. The Hong Kong government will, through the Hong Kong employers, cover 50% of employees’ salaries for six months in two tranches. 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. The government launch a HK$80 billion employment subsidy scheme, capped at $9,000 per month (i.e. Be in touch with the latest news of Accounting and Finance. International Arbitration. The second round of anti-epidemic relief fund of HK137.5 billion received approval by the Finance Committee of the Legislative Council of Hong Kong on 18 April 2020. The list of the first batch of employers covers close to 25,500 employers who receive a total wage subsidy of $4.8 billion with a combined committed headcount exceeding 200,000. Similarly, eligible employers will not be charged for the costs involved in monitoring the ESS (such as the cost of the ESS processing agent obtaining MPF record certificates). New Employment Support Scheme in Hong Kong . One-off subsidies of HK$1 million and HK$200,000 per large and small aircraft registered in Hong Kong respectively. The government and private sectors create 30,000 time-limited jobs at a cost of $6 billion; civil service will recruit 10,000 people in 2020-21. Notably, the subsidies cannot be spent on MPF contributions or to pay for other employee benefits or expenses. Can employers request employees to go on unpaid leave during the subsidy period? The government has rolled out a series of measures to relieve the economic impact brought about by the COVID-19 pandemic. The second round of anti-epidemic relief fund of HK137.5 billion received approval by the Finance Committee of the Legislative Council of Hong Kong on 18 April 2020. The subsidy is given to the employers so that they can keep their staff for the coming six months. How can employers apply for the ESS? The Employment Support Scheme (ESS), a key component of Hong Kong’s Anti-epidemic Fund 2.0, enables HK employers to retain their employees and provide wages. All Rights Reserved. During and after the application vetting process, the ESS Secretariat / processing agent will: The FastLane Group is dedicated to helping SMEs in all aspects. The clawback will be calculated using the following formula: Employers may also attract criminal liabilities if they are found to have made false statements or acted fraudulently. The number of employees of a Hong Kong company that is on payroll cannot currently be smaller than the company’s number of employees (with or without pay) in March 2020. There is no fee to apply for the ESS. Before you communicate with one of our attorneys, please note: Any comments our attorneys share with you are general information and not legal advice. At the time of writing, the details for Tranche 2’s application deadlines have yet to be released. The views expressed in this newsletter are the views of the authors except as otherwise noted. Employers can choose either December 2019, January, February or March 2020 as the “specified month”in which their subsidies would be calculated, Subsidies for June, July and August 2020 will be calculated on the basis of the wages paid in the “specified month”, Wage subsidies for employers and self-employed persons will be disbursed within 3-4 weeks of an applications approval, ORSO schemes may require a longer processing time, At the time of writing, the details for Tranche 2’s application deadlines have yet to be released, “Regular Employees” aged between 18 and 64, 50% of actual wages paid to each “regular employee” in the “specified month”, Wages are capped at HKD 18,000 per month (maximum subsidy per employee is capped at HKD 9,000 per month), To the extent that a Hong Kong employer have provided their employees’ “basic salaries” when making MPF contributions, then wage subsidies will be calculated based on 50% of the basic salaries that were actually paid in the “specified month”, Wage subsidies will be capped at HKD 18,000 per month (maximum subsidy per employee aged 65 or above is capped at HKD 9,000 per month), If a Hong Kong employer has not provided the “basic salaries” when making MPF contributions, then wage subsidies will be calculated by multiplying the amount of the employers’ voluntary contributions in the “specified month”  by 10 times, Wage subsidies will be capped accordingly at HKD 9,000 per month per employee aged 65 or above, The amount of wage subsidies will be calculated based on 50% of the actual wages paid in the “specified month”, with a wage cap at HKD 18,000 per month (maximum subsidy per employee is capped at HKD 9,000 per month), The ESS processing agent to receive MPF records from the applicants MPF trustees; and, The MPF trustee to provide the MPF records to the ESS processing agent, If an employer fails to utilize all the ESS wage subsidies received for a particular month during the subsidy period to pay the employee wages in the same month, the Hong Kong government will claw back the unspent amount, Clawback for a particular month (June / July / August 2020) = Subsidies received – Total actual wages paid to employees, If the number of employees on a company’s payroll in any one month of the subsidy period is less than the number of staff (whether paid or unpaid) in March 2020, the employer is liable to a penalty which is determined by the difference in paid staff, Penalty for making redundancies in June / July / August 2020 = Subsidies received x Headcount reduction percentage x Penalty percentage, Headcount reduction percentage = ((Total number of paid and unpaid staff (as of March 2020)) – (Total number of paid staff in June / July / August) / Total number of paid and unpaid staff (as of March 2020) x 100%, Verify information submitted by Hong Kong employers, Conduct on-site checking at selected Hong Kong employers’ organisations, Disclose publicly the list of employers who have received subsidies, the total number of employees that have benefitted, and the amount of subsidies received, The FastLane Group is dedicated to helping SMEs in all aspects. On 12 May 2020, the Chief Executive announced further details on the newly implemented Employment Support Scheme as well as further expansions. This reflects the undertaking given by applicants to employers maintain their headcount from March 2020 during the subsidy period. For instance, if an employee is terminated (for whatever reason) in April or May 2020, employers should ensure that a new employee is hired by June 2020, so that their headcount in March 2020 is maintained throughout the period of the first tranche (June to August 2020). This package will also launch the. The Hong Kong Government plans to exempt the wage subsidies received by employers from taxation. 10. Electronic Consumption Vouchers, Hong Kong Government Measures To Help Employment and Enterprises Electronic Consumption Vouchers In 2021, electronic consumption vouchers that is of HK$5,000 in total value are to be distributed to each eligible Hong Kong permanent resident and new arrival aged 18 or above. Employees hired after 31 March 2020 will not be eligible to receive subsidies during the first tranche. The second round of anti-epidemic relief fund of HK137.5 billion received approval by the Finance Committee of the Legislative Council of Hong Kong on 18 April 2020. Hong Kong Wage Subsidy Update. Green Employment Scheme: Graduates Subsidy Programme. Payments for the second tranche are expect to be made in September 2020. The amount of the wage subsidy is calculated on the basis of 50% of the monthly wages (actual income as set out in the MPF record certificates which includes subsidies, allowances, double payments, retrospective wage adjustments, commissions, bonuses, and any other contractual gratuity) of a relevant employee. 7. This includes a HK$80 billion Employment Support Scheme (the "Scheme") which will provide time-limited financial support to employers in exchange for undertaking to retain employees. providing wage subsidies to eligible employers on the condition that they undertake not to implement redundancies (i.e. 11. Yes but employees who are on unpaid leave for a particular month will not form part of the employer’s headcount for that month. 5. Having said that, it is possible for employees to take a short period of of unpaid leave per month, or to work part-time, provided that they are paid at least 50% of their usual monthly wages and receive their usual MPF contributions. In this article, we will outline the details of ESS. However, new employees for whom the employers did not make MPF/ORSO scheme contributions on or before 31 March 2020 are not eligible for wage subsidies during the first tranche. Similarly, any employee whose information is not included in the MPF record certificates is not eligible for wage subsidies. ... Hong Kong Special Administrative Region (HKSAR) ... apply, in respect of the same employees, for subsidies under the subsidy scheme of the Transport Department specifically designed for green minibus Employers cannot claim subsidies for new employees (i.e. Employment Support Scheme (ESS) Frequently Asked Questions Objectives 1. The subsidy is 50% of actual wages paid in a specified month for a maximum period of 6 months, and the subsidy is capped at HK$9,000 per employee per month. The city is still trying to snuff out a third wave of Covid-19 infections. to keep headcount at the same number as in March 2020). Application dates for the second tranche of wage subsidies for September to November 2020 will be announced in due course. This article aims … For employers making MPF contributions, the following information should be provided in the online application form: For employers making contributions to ORSO Schemes, the following information should be provided in the online application form: 13. Portions of this communication may contain attorney advertising. June 5, 2020. those who satisfy the criteria set out above), including those who work on irregular days, part-time or variable wages, or with differing pay mechanisms (e.g. Are MPF contributions required in respect of wage subsidies under the ESS? June to November 2020). Applicants will be notified via SMS message and can check the status of application and results (including the approved amount of subsidies disbursed) online at www.ess.gov.hk. The ESS will also provide a one-off lump-sum subsidy of HK$7,500 to self-employed individuals who have made MPF contributions in the past 15 months. Under the scheme, the government will, via employers, pay 50 per cent of employees’ salaries for six months, with the monthly subsidy for each worker capped at HK$9,000. The subsidy for each Hong Kong employee will be capped at HKD 9,000. Tranche 2 will assist employers in paying their employee wages from September 2020 to November 2020. On 12 May 2020, the Hong Kong Chief Executive revealed further details on the first tranche of wage subsidies under the Employment Support Scheme (the ‘Scheme’) and announced several improvement measures to expand the Scheme to cover more beneficiaries. the FastLane Group for assistance in your accounting, auditing, HR and company secretarial matters! 13 May 2020. Application Deadline and Subsidy Distribution Logistics. Subsidies for employees who contribute to ORSO Schemes are likely to take longer to be paid. UPDATE: Hong Kong wage subsidy subject to employers undertaking not to implement redundancy during 6-month subsidy period Print Twitter LinkedIn The Hong Kong Government has issued further clarifications on its relief measures today, 16 April 2020, contained in a report titled " HKSAR Government's package of measures to support individuals and businesses affected by … They must reach an agreement with each employee in order to vary any such terms. Home > GES News > HONG KONG - Second tranche of subsidies under the Employment Support Scheme (ESS) unveiled by the HK. The amount of subsidy an applicant can receive will be calculated in accordance with the employee’s monthly salary specified by the Hong Kong employer. replacements) whose MPF account or membership of an Occupational Retirement Scheme (“ORSO Scheme”) was set up after 31 March 2020. The maximum amount of subsidy is therefore HK$9,000 per month per employee. Labor & Employment The amount of the subsidy will be calculated on the basis of 50% of the actual wages paid to employees for any chosen month during December 2019 to March 2020, irrespective of the way the employee is paid. Employers must also undertake to apply all of the subsidies to pay for the wages of its employees. This incentivises employers to retain existing staff rather than replacing them with new staff on lower wages. Hong Kong’s Employment Support Scheme: further updates and expansions. Please contact the FastLane Group for assistance in your accounting, auditing, HR and company secretarial matters! Sheung Wan Prior results do not guarantee a similar outcome. This alert provides a summary of the ESS and addresses some of the common questions raised by employers regarding the ESS. The … Opening hours (except public holidays) Monday to Friday, 09:00-12:45 and 14:00-18:00. Employers must apply online by 14 June 2020 to participate in the ESS. By post. It follows that employers may risk breaching their undertaking not to implement redundancies (i.e. 2nd June 2020 – (Hong Kong) The Labour Department (LD) announced today that a Subsidy Scheme for Employment Agencies (EAs) will be introduced under the Anti-epidemic Fund to assist EAs to tide over the difficulties arising from the COVID-19 epidemic. However, they must authorise the Hong Kong Government’s ESS processing agent to obtain such MPF record certificates directly from the relevant MPF trustee. The HKSAR Government has launched the “Employment Support Scheme” (ESS) under the second round of the “Anti-epidemic Fund” to provide time-limited financial support to employers to retain employees who may otherwise be made redundant. (“ESS”), which is estimated to cover 260,000 Hong Kong employers and over 1.5 million employees. To the extent that a company fails to comply with the terms of ESS, they may be liable to various penalties. 9. Penalty percentages are calculated as follows. This package will also launch the Employment Support Scheme (“ESS”), which is estimated to cover 260,000 Hong Kong employers and over 1.5 million employees. Attorney Advertising © 2021 O'Melveny & Myers LLP. 9 April 2020 – Wage subsidy and employment relief announced in second round of Anti-epidemic fund. On 12 May 2020, the Hong Kong Chief Executive revealed further details on the first tranche of wage subsidies under the Employment Support Scheme (the ‘Scheme’) and announced several improvement measures to expand the Scheme to cover more beneficiaries. Employers who have set up ORSO schemes can apply for wage subsidies in respect of employees who are members of these schemes and who are Hong Kong identity card holders. Launched under the second-round of the Anti-epidemic Fund, the scheme provides time-limited financial support to employers to retain employees who may otherwise be made redundant. HONG KONG. 50% of monthly median wage of HK$18,000) per employee for six months. reduce the number of employees on the payroll) during the period when employers will receive the wage subsidies; and. Subsidy Scheme for Employment Agencies to be introduced under Anti-epidemic Fund The Labour Department (LD) today (June 2) announced that a Subsidy Scheme for Employment Agencies (EAs) will be introduced under the Anti-epidemic Fund to assist EAs to tide over the difficulties arising from the COVID-19 epidemic. Secretariat of Green Employment Scheme: Graduates Subsidy Programme. However, the wages received by employees are subject to taxation, irrespective of whether they were funded by the ESS or fully paid by their employers. That is, the subsidies cannot be applied for other purposes, including to pay for MPF contributions or other employee benefits. For employees aged between 18 and 64, the amount of the subsidy will be based on 50% of the actual wages of the employee in a "specified month", capped at HK$18,000. Employers may submit their applications online for the first tranche until 14 June 2020 (inclusive) and can expect to receive payment for the first tranche of wage subsidies within four weeks thereafter. Outsource Your Payroll to … Our articles “ New Relief Measures during COVID-19 Pandemic: Hong Kong Launches Employment Support Scheme” and “Employment Support Scheme (ESS) Update”, have monitored the changes and updates with regards to the scheme. This includes a HK$80 billion Employment Support Scheme (the "Scheme") which will provide time-limited financial support to employers in exchange for undertaking to retain employees. Employers can terminate employees during the subsidy period provided that the terminations do not reduce the employer’s headcount to a number that is less than in March 2020. The Hong Kong Government is now receiving applications for its Employment Support Scheme (“ESS”), which aims to subsidise eligible employers up to HK$9,000 per month for each employee. Can employers reduce the wages of employees or implement cost-saving measures during the subsidy period? The Hong Kong Government is now receiving applications for its Employment Support Scheme (“ESS”), which aims to subsidise eligible employers up to HK$9,000 per month for each employee. It follows that employees with Hong Kong ID cards who are working outside of Hong Kong, but for whom their employers make contributions to MPF accounts or an ORSO scheme, are eligible for subsidies. The Hong Kong Government’s Employment Support Scheme — Cash Subsidies for Hong Kong Employers. 2. The Labour Department (LD) today (June 2) announced that a Subsidy Scheme for Employment Agencies (EAs) will be introduced under the Anti-epidemic Fund to assist EAs to tide over the difficulties arising from the COVID-19 epidemic. TheESS is a funding scheme, launched by the Hong Kong government in response to COVID-19. employees who are members of employers’ MPF-exempted ORSO Schemes. O’Melveny uses cookies to improve functionality and performance, by continuing to this website, you are replacements hired after 31 March 2020) during the period of the first tranche. What information and documents are required to be submitted for online applications? Business Registration Number or other registration numbers; Name of the MPF Trustee (and include all MPF schemes participated from 1 December 2019 to 31 March 2019) and Scheme Registration / Participation Number; Number of eligible employees in March 2020 with designated form to provide information of eligible employees, including the wage of each employee in the “specified month; Name of the MPF-exempted ORSO Scheme, MPF Exemption Number and ORSO Registration / Exemption Number; Number of eligible employees in March 2020 with designated form to provide information on eligible employees, including the wage of each employee in the “specified month”; Scanned copy of the exemption certificate issued by Mandatory Provident Fund Schemes Authority. Thank you for your interest. What happens if employees resign? While details were not initially released, the Hong Kong government provided greater clarity on this scheme on 18 May 2020 and how ESS will help employers retain their employees who would otherwise be made redundant. Hong Kong Update: Hong Kong Employment Support Scheme: Further implementation details on 18 May 2020 Print Twitter LinkedIn On 18 May 2020, the Government introduced the detailed implementation plan for the Employment Support Scheme (ESS), the application of which will start at 7:00 am on Monday, 25 May 2020 via the ESS Online Portal ( www.ess.gov.hk ). The penalty will be calculated using the following formula: The penalty percentage is based on an escalating scale and varies from 10% to 80% depending on the total number of employees in March 2020. Employers are not required to provide their MPF record certificates when lodging an application. The amount of subsidy is based on 50% of the actual wages paid to each employee in a "specified month", capped at HK$18,000. 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