The second tranche of wage subsidies under the HKSAR Government’s Employment Support Scheme (“ESS”) covering the period from September to November 2020 is now open for online application until 13 September 2020.

Eligibility for ESS

Basically, the eligibility criteria for employers to enroll for the second tranche of ESS wage subsidies remain the same as that of the first tranche. In particular, employers and employees with Mandatory Provident Fund (“MPF”) accounts set up on or after 1 April 2020 are still not eligible for the second tranche of ESS wage subsidies. However, self-employed persons who received the one-off lump-sum subsidy of HK$7,500 in the first tranche are not eligible to apply for the second tranche of ESS wage subsidies.

Specified months covered by ESS

Same as the first tranche, employers applying for the second tranche of ESS wage subsidies can choose any one month between December 2019 and March 2020 as the “specified month”. Employers who had applied for the first tranche of ESS wage subsidies are allowed to choose another month as the “specified month” when applying for the second tranche of ESS wage subsidies.

Employees aged over 65 or above with MPF accounts

If information on the employment of employees aged 65 or above (but not their wages or the MPF contributions made for them by their employers) is shown on the employers’ MPF record certificate, the amount of ESS wage subsidies will be calculated based on the number of such employees engaged in the “specified month”, with a subsidy of HK$5,000 per employee per month.

If the amount of ESS wage subsidies for any of the employees aged 65 or above calculated based on wages or voluntary contributions on the employer’s MPF record certificate is below HK$5,000 per month, the employers may receive ESS wage subsidies of HK$5,000 for each of such employees per month.

Application procedures

The application procedure for the second tranche of ESS wage subsidies is the same as that for the first tranche. Applications should be made through the official ESS website and employers who had not applied for the first tranche of ESS wage subsidies are required to upload certain documents to complete their application.

As regards employers who already received their first tranche of ESS wage subsidies, they are still required to submit a new application for the second tranche of ESS wage subsidies. The information/ documents required but already uploaded/ submitted for the application of the first tranche of ESS wage subsidies may be accessed by employers by logging in to their ESS account (i.e. they do not need to input the MPF scheme related information or upload the documents again for the application of the second tranche of ESS wage subsidies). However, if an employer chooses another “specified month” when applying for the second tranche of ESS wage subsidies, they may need to upload new documents/ update information where necessary. Please note that employers must use the same bank account information for both the first and second tranche of ESS wage subsidies, with the exception of certain special circumstances.

Undertakings

Same as the first tranche of ESS wage subsidies, eligible employers are required to undertake and guarantee that:-

• all wage subsidies will be spent on paying wages to their employees; and
• they will not implement redundancies during the subsidy period – the total number of employees on the payroll (excluding those on no-pay leave) in any one month of September to November 2020 should not be less than the total number of paid and unpaid employees in March 2020.

Additional undertakings are required to be provided by the following companies:

• Wellcome and PARKnSHOP will have to offer cash coupons or discounts to non-governmental organizations and the underprivileged in return for the wage subsidies they receive in the second tranche; and
• Major estate management companies will have to give back at least 80% of the subsidies they receive in the second tranche to subsidize the residents and/or the incorporated owners of properties for the maintenance fee and property management fee.

Penalties

The penalty and claw-back mechanisms under the first tranche of ESS wage subsidies will continue to apply. In addition, the following penalty and claw-back mechanisms have been introduced for the second tranche of ESS wage subsidies:-

• For an employer who already received the first tranche of ESS wage subsidies and applies for the second tranche, the Government reserves the right to reject their application if it considers the magnitude of redundancies made by them in June to August 2020 was substantial, and such employer fails to prove their intention to employ persons to replace those being laid-off and/ or re-employ those who have been laid-off, and/ or there are no other reasonable explanations for making the redundancies; and
• The Government reserves the right to claw-back the second tranche of wage subsidies disbursed to an employer (in full or in part) if it considers the magnitude of redundancies made by them in September to November 2020 to be substantial, and such employer fails to prove its intention to employ persons to replace those being laid-off and/ or re-employ those who have been laid off, or there are no reasonable explanations for making the redundancies.

Period of disbursement

The second tranche of ESS wage subsidies are generally expected to be disbursed to eligible employers three to four weeks after submission of the application.

For more information about the second tranche of ESS, please visit the website of the Government: LINK

You may also read our previous article on Anti-Epidemic Fund and the ESS: LINK