Gov't unveils employment measures

April 20, 2020

The Government will launch a series of measures to retain and create jobs to prevent massive layoffs amid record levels of unemployment and underemployment for the first three months of the year.


The seasonally adjusted unemployment and underemployment rates have soared recently due to the severe blow dealt by the COVID-19 epidemic to Hong Kong’s economy.


With reference to the practice of some overseas governments in providing wage subsidies to employers and following the funding approval by the Legislative Council Finance Committee, the Government will launch the $81 billion Employment Support Scheme (ESS) as soon as possible.


The scheme will provide time-limited financial support to employers to retain workers who will inevitably be made redundant due to the downturn in business.


The provision of subsidies for employers, together with other relief measures and loan arrangements under the Anti-epidemic Fund and the 2020-21 Budget will help businesses stay afloat and retain jobs to prepare for a quick recovery once the epidemic is over.


Except for the Government, statutory bodies and government-funded organisations whose employees' salaries are not affected by the epidemic, employers who have been making Mandatory Provident Fund (MPF) contributions or have set up Occupational Retirement Schemes will be eligible for the ESS.


Employers joining the scheme have to provide an undertaking not to implement redundancies during the subsidy period and spend all wage subsidies from the Government in paying wages to their employees.


Wage subsidies provided under the ESS are calculated based on 50% of wages in a specified month subject to a wage cap of $18,000 per month for six months.


Payment will be made in two tranches, with the first payout no later than the end of June to subsidise employers to pay employees' wages from June to August.


After approval of the application, the number of employees on payroll shall not be less than the number of employees in March and the wage subsidies applied by employers must be used fully for employees' wages.


Under the ESS, self-employed people who have contributed to the MPF from January 1, 2019 to March 31 will be granted a one-off subsidy of $7,500.


The scheme is expected to benefit over 260,000 employers who have been making MPF contributions or have set up Occupational Retirement Schemes for 1.7 million employees, and about 215,000 self-employed people.


Employers and employees in the catering, construction and transport sectors that are not covered by the MPF will be taken care of by sector-specific schemes.


Regarding job creation, the Government has earmarked $6 billion to create about 30,000 time-limited jobs in public and private sectors in the coming two years for people of different skills and academic qualifications.


This is in addition to more than 10,000 civil service job openings for replacing retirees and filling new posts to be created in the 2020-21 Estimates, and about 5,000 short-term interns for young people.


In the second half of the year, the Labour Department will raise the ceiling of the on-the-job training allowance payable to employers under the Employment Programme for the Elderly & Middle-aged, the Youth Employment & Training Programme and the Work Orientation & Placement Scheme to further encourage employers to hire seniors, youngsters and the disabled.


The department plans to launch a pilot scheme in the second half of the year to encourage these people to undergo and complete on-the-job training under the above-mentioned employment programmes through the provision of a retention allowance.


A time-limited unemployment support scheme will be launched through the Comprehensive Social Security Assistance Scheme at the same time to provide timely and basic financial support to the unemployed who may not be covered by the ESS.


To maintain Hong Kong's economic vibrancy and relieve the financial burden of the public under the epidemic, the Government has introduced the largest package of relief measures to date, including the one-off relief measures in the Budget costing $120 billion and two rounds of measures under the Anti-epidemic Fund totalling $287.5 billion.


This accounts for about 10% of Hong Kong's gross domestic product, the Government added.

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