As the novel coronavirus spreads across the world causing huge influence to global economy, companies are trying hard to stay afloat. The Hong Kong SAR Government has unveiled two rounds of Anti-epidemic Fund relief measures, comprising various initiatives to provide support to the hard-hit sectors.
One of the major measures included in the Anti-epidemic Fund is a HK$80 billion Employment Support Scheme (“ESS”), which provides wage subsidies to eligible employers to retain their employees.
Information of the Employment Support Scheme
|Information & Document Required||
Employers who plan to apply for the ESS may have concerns over the business flexibility and potential risks under the scheme. Below please find some highlighted FAQs:
Employers must spend all the Government’s wage subsidies for a particular month to pay the wages of his/her employees in the same month. While employers can use the subsidies for wage increase or hire of additional manpower, they should not reserve the wages subsidies for future use.
Yes. The application details of the second tranche subsidy will be announced after completion of the vetting process of the first tranche applications.
How to prove that no redundancies were implemented and the employer has used all of the subsidies on paying wages to their employees?
ESS Secretariat and the appointed Processing Agent will perform auditing through employers’ MPF record certificates for the subsidy period (i.e. from June to August 2020), covering the total number of employees and the wage expenditure provided by MPF trustees.
Should employers fill the vacancies to maintain the number of employees as of March during the subsidy period?
Yes. If employers expect reduction in the number of employees during the subsidy period, they must fill the vacancies to maintain the total number of employees as of March 2020, in order to avoid penalty.
What information should the employers participating in ESS provide to the Government for monitoring?
When employers participating in MPF schemes submit their applications, they are required to authorise the ESS Processing Agent to serve as their agents to receive certificates on the relevant MPF records (including the number of employees and wages) issued by the MPF trustees, as well as to authorise the MPF trustees to provide the ESS Processing Agent (as their agent) with MPF record certificates to verify the information related to their MPF contributions. With the applicants’ authorisation, the MPF trustees will forward the MPF record certificates in electronic format to the ESS Processing Agent directly.
When processing applications, the ESS Processing Agent will verify all information submitted by the employers and conduct sample on-site checking of the original copies of wage records, so as to monitor the usage of the wage subsidies and whether there is any staff redundancies.
The data collected under ESS is primarily the total number of employees and their wages. To prevent applicants using false or incomplete information to apply for ESS, employers should retain the original copies of the relevant documents for two years for the purpose of auditing.
In the unfortunate event of close down of a company, the Government will claw back the unspent balance of the subsidies after its closing down or during the subsidy period, and impose a penalty.
For an employer who has received the first tranche of subsidies, if all the wage subsidies received for a particular month during the three-month subsidy period (i.e. June to August 2020) are not used to pay the wages of the employees in the same month, the Government will claw back the unspent balance of the subsidy. Furthermore, if the number of employees on the payroll in any one month of the subsidy period is less than the number of employees (whether paid or unpaid) in March 2020, the employer will have to pay a penalty to the Government.
The calculation of the penalty for individual months is as follows –
Applicants must provide true, complete and accurate information when making the applications, otherwise, the relevant applications may be rendered invalid, rejected and/or disqualified. Any person who makes false statement, misinterprets or conceals the facts, or furnishes false documents in an attempt to deceive the Government and/or its appointed agencies will be guilty of criminal offence and subject to prosecution.
hkMS provides you with professional advice and assistance. Please do not hesitate to contact us for discussion.