The next round of Hong Kong’s Covid-19 wage subsidy scheme will open for applications on Friday and begin disbursement in early May. Employers must spend all of the funds on employee salaries or face a penalty.

The Secretary for Labour and Welfare, Law Chi-kwong and the Head of the Policy Innovation and Co-ordination Office, Doris Ho (left). Photo: GovHK.

The government announced the details of the Employment Support Scheme (ESS) at a press conference on Monday afternoon. Companies will be able to apply for wage subsidies for up to 1,000 members of staff within a 14-day period from Friday.

Firms will get a monthly maximum of HK$8,000 per eligible full-time employee from May to July, and half that amount for part-time staff who earn at least HK$3,000 monthly.

Employers can also apply for staff with a monthly income of less than HK$3,000 if they are aged 65 or over, for whom they will receive at most HK$4,000 monthly.

Unlike the first round of ESS in 2020, all employers will be required to use the full subsidy on wages, which must be reflected in staff MPF contributions. If firms breach the rule, they will be expected to return the full amount of subsidies received and pay an additional 10 per cent extra as a fine.

A dessert shop in Tai Wai. Under Covid-19 restrictions, restaurants are not allowed to open past 6 p.m. and can only offer takeaway. Photo: Hillary Leung/HKFP.

Doris Ho, the head of the Policy Innovation and Co-ordination Office, said during the press briefing that the scheme had “mostly benefited those on top” last time.

“[We] discover that some people took the HK$8,000 subsidy and did not pay the full amount to the employee as part of the salary. They could have given a portion of it [to the member of staff in question] and paid another staff member of with the rest,” Ho said.

Restricted industries

When Chief Executive Carrie Lam first announced the new round of Employment Support Scheme, she said the government would exclude large supermarkets and pharmacy chains, and other businesses “unaffected” by the fifth-wave outbreak.

Chief Executive Carrie Lam addresses the media on April 7, 2022. File photo: Hillary Leung/HKFP.

In the end, the subsidy scheme was made available to firms from these industries, but they are restricted to a maximum of 100 applications only.

In addition, Lam initially said there would have been a salary cap for the scheme but it was scrapped after she took into account “society’s views,” “the severity of the pandemic,” and opinions from industry representatives.

Employers from local and foreign governments, statutory bodies and other publicly-owned companies will be excluded from the subsidy scheme.

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Peter Lee

Peter Lee is a reporter for HKFP. He was previously a freelance journalist at Initium, covering political and court news. He holds a Global Communication bachelor degree from CUHK.