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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...
*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.
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.
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.
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].
The government will focus on monitoring the headcount of
participating employers, rather than checking on each and every
individual employee.
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.
The entire government subsidy must be utilized towards paying
staff salaries and not any other purposes.
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.
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].
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
Innovation and Technology industry
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.
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:
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