How Can The Employee Support Scheme Benefit My Business During COVID-19 in Hong Kong?
Updated: Sep 7, 2022
There have been several rounds of support provided by the Hong Kong (HK) government to help businesses and individuals cope with the impacts of COVID-19.
In this short blog we will be focusing on general business or support related to manpower, rather than support specific to any particular sectors. We hope this would be an useful and concise summary of policies impacting business owners and human resource (HR) teams.
So far there have been 3 phases of support from the HK government. The first 2 phases were rolled out in the month of February 2020 collectively amounting to $150 billion. The funds were largely targeted at enhancing anti-epidemic capability and alleviating the pressure on enterprises from specific sectors and individuals directly affected by COVID-19, to help the Hong Kong community tide over the current economic difficulties, to safeguard jobs and to support the resilient community.
Employment Support Scheme
The Government has assigned $81 billion to help employers retain their employees by providing time-limited financial subsidies to eligible employers and preventing carrying out redundancy during the subsidy period. Private sector employers will be provided subsidies for 50% of actual wages paid in a specified month for a maximum period of 6 months, capped at HK$9,000 per employee per month. It is expected to benefit around 270,000 employers that covers around 1.77 million employees, plus an estimated 215,000 self employed persons. Employers who are making Mandatory Provident Fund (MPF) contributions or have Occupational Retirement Schemes Ordinance (ORSO) set up for regular employees with the relevant accounts opened on or before March 31, 2020 will be eligible. Self-employed persons (SEPs) that have set up an active MPF account on or before March 31, 2020 will receive a one-off lump sum subsidy of $7,500, given that the MPF account remains open as of March 31, 2020. This scheme comes from the Chief Executive’s Office supported by the Labour and Welfare Bureau and is implemented by Policy Innovation and Coordination Office.
Obligations: All wage subsidies from the HK Government must be spent on employees’ salaries; non-compliance will incur claw-back and additional penalty. Apart from not making redundancies, the number of employees on payroll during the subsidy period (from June to August 2020) shall not be less than the number of employees in March 2020 (with or without pay).
Wage subsidies are calculated on the basis of:
50% of the actual wages paid to employees at a specific month (any one month between December 2019 and March 2020 to be nominated by the employer)
Subject to a wage cap of $18,000 per month (median wage at 2019 Q2)
For a period of 6 months in 2 tranches.
Payment to employers will be made in 2 tranches:
1st tranche online application commences on May 25, 2020 and lasts for three weeks. Subsidies will be disbursed within 3-4 weeks after application in hope of supporting salary payments for June to August 2020.
Application for the 2nd tranche will be announced in due course taking into consideration the 1st tranche experience and the economic conditions, with payment to be made in September 2020 for wage periods between September to November 2020.
The HK Government has assigned $6 billion on job creation for people of different skills and academic qualifications. In order to relieve the worsening unemployment situation in the coming 2 years, the Government aims to create 30,000 time limited jobs (up to 12 months) in public and private sectors. Government and public organisations will create over 10,000 civil service jobs openings for replacing retirees and filling new posts in the period of 2020-21, on top of another 5,000 short-term interns for the younger generation. This is coordinated by the Civil Service Bureau and implemented by relevant departments and public bodies.
Recruitment and procurement of services will be initiated by the respective bureaux and departments in corporation with the new and existing consultants or contractors. The Government will also engage non-government public bodies and private corporations to administer a similar programme.
Examples of Jobs to be created:
Seasoned professionals e.g. legal, accounting, financial services (~1,640 jobs)
Technicians and supporting staff to carry out various construction projects or maintenance works (~ 4,600 jobs)
Fresh graduates (~200 jobs)
Positions to promote arts and culture or green lifestyle (~ 550 jobs)
Middle level and grassroot workers (~ 3,300 jobs)
Further Information About Hong Kong Government Support During COVID-19
As a business owner based in HK, it is imperative that you know the financial assistance that are available to you in order to keep your business running during these uncertain times. For your convenience, we have compiled together a free e-book for you to download to find out more information about the various government support schemes that can benefit your business. You may download it here.
Alternatively, book a consultation with us for more info or if you have any inquiries on how JustLogin’s HR module can improve your HR processes.
For happy HR, bosses and employees, you want a platform that can help your team remain productive and focused, while providing excellent employee experiences that impresses and retains talent. JustLogin is the HR employee experience platform that delivers both through a comprehensive suite of HR applications.