Hong Kong government launches unemployment initiatives



The Temporary Unemployment Support Programme will provide a one-off lumpsum of HK$10,000 to eligible individuals who have temporarily lost their jobs, while the Employment Protection Scheme is making a return.

In a press conference on Friday (18 March 2022), Hong Kong Chief Executive Carrie Lam announced two initiatives to help deal with rising unemployment in the city as the economic pressures from the government’s epidemic measures are faced as the city continues to battle the fifth wave of COVID-19 infections.

The first initiative by the government is the ‘Temporary Unemployment Support Programme’ announced earlier under the sixth round of anti-epidemic funding. With an estimated cost of HK$3bn, the plan is projected to help up to 300,000 short-term unemployed people in Hong Kong. The second is ‘Employment Protection Scheme’ which is expected to benefit between 1.1mn and 1.3mn employees and will require utilisation of HK$26bn to HK$31bn.

Here’s what you need to know.

Temporary Unemployment Support Programme

Launched in February 2022, the Temporary Unemployment Support Programme provides a one-off lumpsum of HK$10,000 to eligible individuals who have temporarily lost their jobs due to the fifth wave of the virus, to alleviate some financial pressure before finding a new job. Both full-time and part-time employees, as well as self-employed people, can apply.

The scheme has been expanded to include beneficiaries who perhaps are still employed but been forced to suspend their work because of closures – such as beauty salons, fitness centres or restricted catering establishments – whether they are granted unpaid leave or asked to stay at home, such employees are eligible for the scheme.

Applications open on 23 March 2022 for a period of three weeks. Eligibility criteria is as follows:  

  1. Applicants are required to have worked in Hong Kong for at least one month during the fourth quarter of last year and their monthly income is between HK$2,700 and HK$30,000, (which covers 75% of wage earners in Hong Kong),
  2. Applicants must have been without work or employment for at least 30 consecutive days before submitting their application. 

Most applications will use the MPF account record to verify the person’s eligibility.

The government will also accept applications from persons without MPF accounts, however, as there is no MPF account data, these individuals are required to submit additional information for the NGOs entrusted by the Government to process their applications.

“The Temporary Unemployment Support can undeniably solve the urgent needs of the unemployed, but it is always a one-time measure,” said Lam. “To really help the unemployed, we need the market to provide more jobs. Therefore, while the community continues to do its utmost to contain the epidemic, we must also begin to make appropriate arrangements for restarting the economy.” 

Employment Protection Scheme 2022

The 2022 Employment Protection Scheme aims to support industries directly or indirectly affected by the fifth wave of the epidemic, especially SMEs.

Although still in the framework stages, the CE said lessons had been learnt from the 2020 scheme and adjustments had been made such as a salary ceiling for beneficiary employees, that is, if the enterprise employs some high-paid employees, they are not the beneficiaries of this employment protection plan; the exclusion of industries that are not affected by the epidemic (such as large supermarket chains, property management companies); and, the government requiring that the wage subsidy provided by the government must be used for employees.

The framework sets out the following:

  1. The scheme provides a three-month wage subsidy for eligible employers, covering May, June and July 2022. Subsidies, as in 2020, are paid to employers.
  2. Only employees with a monthly income of less than HK$30,000, will be eligible for wage subsidies.
  3. The monthly subsidy amount for each full-time employee is a flat monthly subsidy of HK$8,000.
  4. Employers can propose the number of subsidised employees to be more realistic, but the number of beneficiaries cannot exceed the specified ceiling.
  5. Employers are required to employ no less than the number of subsidy employees whose applications and approvals are made during the three-month subsidy period. At the same time, a new requirement was added, that is, the employer’s wage subsidy of HK$8,000 from the government must be used on this employee,
  6. Industries that have not been too affected by the epidemic are not eligible. Such industries include large supermarket chains, large pharmacies, property management companies, banks, financial institutions, courier companies, telecommunications operators.

“When the Employment Protection Scheme was launched in 2020, I described it as an unprecedented ‘timely rain’ measure; today’s Employment Protection Scheme is a measure to support businesses, maintain employment, and boost confidence,” said Lam. 

The latest unemployment rate released by the Census & Statistics Department (17 March) showed the seasonally adjusted unemployment rate climbed to 4.5% for the period between December 2021 and February 2022, rising by 0.6 percentage points compared with the previous period from November 2021 to January 2022.

Total employment dropped by about 33,700 to 3,642,800 while the labour force fell by about 11,000 to 3,800,700.

There were 157,900 unemployed people from December 2021 to February 2022, an increase of around 22,700 from the preceding three-month period. The number of underemployed people rose by around 17,100 to 86,900.

Analysed by sector, the unemployment rate of the consumption and tourism-related sectors combined increased notably by 1.4 percentage points over the preceding three-month period to 6.9%. Among these sectors, the unemployment rate for food and beverage service activities surged 1.9 percentage points to 8.1%.

Meanwhile, the unemployment rates of the construction sector and the arts, entertainment and recreation sector swelled by 1.5 and 2.9 percentage points to 6.2% and 8.2% respectively.

ALSO READ: Three things for employers to consider to prepare for a potential lockdown in Hong Kong

Photo / 123RF

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