30 April 2020
Introduction
We have previously reported on the initial details of the Hong Kong Government’s Employment Support Scheme (“ESS”) on 17 April 2020.
Funding for the ESS has now been approved by the Legislative Council and it is expected that applications for the ESS will open by the end of May.
Under the document approved by the Legislative Council, employers will be required to undertake not to implement redundancies during the Subsidy Payment Period (June to November 2020). While the government is still working out the details of the ESS, it appears that the government will introduce a further requirement in relation to timing.
From the announcement made by government in the past week, the number of employees on the payroll of an employer during the Subsidy Payment Period (June to November 2020) must not be less than the number of employees in March 2020. This plugs a loophole that would have let employers make staff redundant between the announcement of the ESS and the commencement of the payment period in June, while still qualifying for the subsidy. There is no indication that the obligation to give an undertaking not to implement any redundancy during the Subsidy Payment Period has changed.
The government has not yet indicated the consequences for an employer who cannot meet this headcount maintenance requirement. We expect there will be further adjustments to the terms of the ESS subsidy before the application for the ESS opens in May.
Yonah Leung, Senior Associate, Eversheds
yonahleung@eversheds-sutherland.com
