Legco go signal for $43b funding to support employment scheme

The Legislative Council has approved pumping HK$43 billion into the anti-pandemic fund for a new round of the updated Employment Support Scheme.

Secretary for Labour and Welfare Law Chi-kwong expects the registration for the scheme to open late this month and companies to receive the subsidies as soon as next month.

The scheme aims to provide financial assistance to employers in paying workers' salaries so that they do not need to fire staff because they cannot afford to pay salaries amid the fifth wave.

Under the scheme, companies receive HK$8,000 for each full-time worker for three months - May to July. Each company can apply for the subsidy for 1,000 workers at most.

But industries on a "restricted list" - including supermarkets and pharmacies - can only apply for the subsidy for a maximum of 100 employees.

The government has made some changes to the scheme, including removing the HK$30,000 salary cap on employees, allowing part-timers and casual workers to be eligible for a half-rate wage subsidy of HK$4,000, as well as covering self-employed individuals and employees aged 65 or above with a mandatory provident fund account.

Law expects about 1.6 million workers to benefit from the new round.

Employers could file their applications with the number of employees they quoted in the last round of the scheme two years ago or the employee numbers updated by the fourth quarter last year.

Authorities will not distribute the subsidies on a real-name basis, despite some lawmakers suggesting so.

"If we have to process the personal information of 1.6 million people, as well as storing, searching and cross-checking, it would lengthen the entire administration procedure and increase the cost," Law said. "The scheme is not on a real-name basis, but we will ensure that the HK$4,000 or HK$8,000 subsidies will be [for their salaries.]"

He said authorities will verify employees' mandatory provident fund accounts to ensure the subsidies will be used to pay employees' wages.

As for the last round of the scheme in 2020, about 80 percent of enterprises kept hiring a particular number of employees as promised.

Authorities have also taken action and sought compensation from employers who failed to keep the promise, with about 90 percent of HK$1.6 billion worth of subsidies having now been recovered.

Chief Executive Carrie Lam Cheng Yuet-ngor extended her gratitude to the Legislative Council's Finance Committee for approval of the funding, which she said could provide a short-time wage subsidies to small and medium-sized firms to keep their staff or even hire more when their business bounces back.

The government expects the new tranche of the scheme to benefit some 160,000 employers, 1.6 million employees and 140,000 self-employed workers.

carine.chow@singtaonewscorp.com