The Hong Kong government has expanded its job-saving scheme aimed at helping employers cover workers’ wages during the Covid-19 pandemic, with an estimated 440,000 more employees now included.
Announcing the revised Employment Support Scheme (ESS) at a Thursday press conference, Chief Executive Carrie Lam said authorities had modified the scheme from last month – when she first gave details – based on input from various stakeholders.
While Lam said in March that the government would only subsidise the wages of workers who earn less than HK$30,000 a month, the salary threshold has since been dropped. The monthly subsidy amount will remain at 50 per cent of workers’ salaries, capped at HK$8,000.
“Taking into account society’s views and the severity of the pandemic, and also some industries including small to medium enterprises and IT start-ups told us they don’t have many workers but salary is relatively high… so we agreed,” Lam said on Thursday. “The 2022 ESS will not have a salary cap.”
Supermarkets, pharmacies and delivery companies with over 50 employees – which Lam said earlier would be excluded from the scheme – will also stand to benefit, although they will only receive the equivalent of a maximum of 100 employees’ subsidies.
The ESS will cover the period between May and July. Applications will open this month.
The scheme was introduced in 2020 to help employers pay staff who might otherwise be made redundant, especially in industries hardest hit by pandemic-related closures.
It provided financial support, proportionate to the company’s payroll, to employers who promised to retain a fixed number of employees. Under the 2020 scheme, the government’s per-employee monthly subsidy was HK$9,000, or HK$1,000 higher than this year’s scheme.
LegCo to approve funding next week
The ESS will also be opened up to gig workers and those working part-time, but their employers will only receive a maximum of HK$4,000 per employee. It will also subsidise the wages of workers aged 65 and up with MPF accounts, the city’s compulsory pension fund.
With the changes, the cost of the ESS would increase from around HK$31 billion to around HK$39 billion, Lam said. Including a 10 per cent “emergency funding,” the scheme will cost HK$43 billion. The wages of an additional 440,000 workers will be subsidised.
The Legislative Council’s Finance Committee will discuss and potentially approve the additional funding next Tuesday. “[I] hope lawmakers will support this,” Lam said.
Hong Kong is still reeling from its worst Covid-19 outbreak since the epidemic began over two years ago, though it has gradually eased over recent weeks. The city recorded 2,644 infections on Thursday, the lowest in almost two months.
Strict social distancing restrictions have been in place since January, with dine-in at restaurants banned after 6 p.m. and bars, gyms, salons and other establishments closed.
Unemployment rose to 4.5 per cent between December to February, up from 3.9 percent in the previous three months. The food and beverage industry, as well as the entertainment sector, were the most affected.