85% Workers in Hong Kong Affected by COVID-19! HKCTU Proposes Cash Allowance to Workers NOW!!!

The Confederation of Trade Unions collected nearly 400 surveys between March 23 and April 3, 2020 looking at how different workers are being affected against the backdrop of COVID-19 and would like to provide suggestions for the protection of the rights of the workforce.

The questionnaire is designed to look into the different impacts and pay models across different sectors comprehensively, areas concerning the loss of income, the length of such losses, and the problems relating to the individual workers and their family, as well as to provide inputs and suggestions from the workers.

Respondents represented a wide range of industries, including retail, domestic helper, education, logistics, education. Half of the respondents received a monthly income, followed by those who received an hourly or an irregular (commission-based job or piecework) wage.

About 85% of the respondents said their job was affected by the pandemic, of which 46% saw work schedules reduced while another 22% were placed under unpaid leave. Other workers also experienced different forms of salary reduction.

There have been different levels of income loss. 70% of respondents reported to have lost over half of their monthly income in the past month while close to a quarter said they have lost all income. The situation of income loss experienced by workers in Hong Kong is serious and it will take a heavy toll on them and their family should the situation persist.

77% of respondents have been put on unpaid leave or seen their salary reduced for over a month while 22% for over two months or more. Over 90% of workers in the survey said their jobs have been terminated or suspended for over a month while 70% for two months or more. Both employees or those who have been laid off experience a continued loss of income due to their employer’s arrangement in the face of the pandemic, burdening themselves individually and their family.

Anxiety over the future has been felt by 74% of the interviewees while 44% was overspending on their income. Signs of depression, such as low mood, loss of appetite, loss of sleep; and increased tension with other family members have also been reported. The situation will persist and worsen if the conditions among workers are not improved as experts are of the view that the pandmenic will not be over anytime soon.

A total of 87% of the respondents was of the view that the Government should provide financial aid to relief workers who are facing the different losses of income in the coronavirus crisis.

In terms of government measures, 80% of the workers in the survey expressed dissatisfaction.

Overall, it was commonly felt that the Government measures were inadequate to respond to the pandemic and that more should be done to provide comprehensive protection for workers who are facing various hardships. Many also expressed in the survey where the measures have fallen short or failed to offer protection, for example: the lack of measures dealing with those subject to unemployment, underemployment, and unpaid leave, as well as relief provided to employees or self-employed workers. In dealing with the crisis, the Government should widen the scope of protection, helping both the market and its workforce.

 

HKCTU's Proposal on job protection in the fight against coronavirus

Providing cash allowance to employees and self-employed persons affected by the pandemic

Hong Kong’s economy has been hit hard by COVID-19 touching many and across different industries, such as retail, food and beverage, travel, hospitality, transportation and many more. The livelihood of workers are affected as closure of business and layoffs become commonplace while others are put on unpaid leave. CTU suggests that financial assistance be offered to those who have lost their job, are underemployed, or placed on unpaid leave due to the pandemic since February to provide urgent relief needs.

  • Unemployment: Employees who have been made redundant or have taken involuntary severance may receive cash allowance of 80% of the salary of their last employment (or of the average income over the preceding 12 months), up to $16,000 per month (slightly higher than 80% of the average of monthly salary) for up to six months.
  • Underemployment: Employees or self-employed persons (SEPs) may receive a cash allowance of up to 80% of their regular monthly income (or of the monthly average over the preceding 12 months), up to $16,000 per month for up to six months if their income decreases by 20% or more due to underemployment.
  • Unpaid leave: Employees who have been placed on unpaid leave due to the pandemic may receive a daily allowance calculated based on 80% of the regular daily wage (or on an average of daily wage over the preceding 12 months), up to $535 up to 180 days.
  • Mandatory quarantaine: Employees or SEPs may receive a cash allowance of 80% of the average daily wage of the preceding 12 months due to absence from work because of mandatory quarantine. In the long run, the Government should amend the law to introduce a quarantine allowance mirroring the sick leave allowance which requires employers to pay for employees who are absent from work due to mandatory quarantine.

An applicant should only need to provide supporting documents or make a declaration but not be subject to an income or assets test to be provided the allowance in order to make the application process simple, reduce administrative costs and provide relief to those workers and their family who are affected by the crisis.

The expected cost is to be around $30 billion if the proposal benefits 50,000 persons, with each person receiving $15,000 for an average of four months.

Providing employee salary allowance for companies

The global spread of COVID-19 has devastated many different sectors in Hong Kong. Business still has a long way ahead even if the local condition comes under control within a short time.

CTU recommends that a monthly allowance be disbursed to employees through the employers in the second quarter to support businesses to remain in operation so that positions and income of the workers are protected. In order to discourage employers from laying off staff, reducing work schedule and placing them on unpaid leave, we recommend that the amount of the allowance be based on five folds the amount of the employer’s MPF contribution of the preceding two months (whichever lower), which is equivalent to 25% of the “relevant wages” the employer should provide. As the allowance is based upon the lower of the two months of the MPF contribution, the allowance an employer receives will be lessened in the subsequent two months should the employer cut cost at the expense of employees, such as lay off, reduce salary or place staff on unpaid leave.

For example, if the employer’s MPF contribution, which is normally $50,000, is reduced to $40,000 because staff have been placed on unpaid leave in March, the company should thus receive an expense allowance five times the amount of the said $40,000, i.e. $200,000, for April and May, while the allowance amount could be increased to $250,000 for June.

The initiative will cost about $40 billion based on the 2019 figures of MPF contribution and should be extendable if the economy does not improve.

Covering the salary expenses for employers affected by the lockdown

The Government has ordered closure of certain venues, such as fitness centres, places of amusement, karaokes, bars, amusement game centres for 14 days in order to curb the risk of community spread of COVID-19 with the potential of extension both in length and scope. CTU recommends salary (including wages, MPF and other benefits) be paid to the employees who are working at those places that have been affected through their employer who may take out an interest-free loan from the Government with the employer to provide to the employees records of payment (such as bank transfer records) to offset the loan. In the avoidance of duplication from different types of allowance, an employer who receives the above 25% subsidy must be offset against [1] what they receive from the lockdown allowance.

Assuming there are 50,000 employees affected by the lockdown, this initiative will cost about $2 billion with each person receiving an allowance of $40,000.

Creating 50,000 temporary jobs

It is expected that Hong Kong’s unemployment will worsen in the next six months due to global recession caused by COVID-19. CTU recommends that 50,000 temporary jobs be created for six months, in areas including cleaning, repair and maintenance of residential buildings and in environmental protection.

The opening of these jobs will cost about $6 billion if each position is estimated to provide a monthly salary of $20,000.

 

Proposal on job protection in the fight against coronavirus

 

Targets

Amount/No. of positions

Duration

 

Providing cash allowance to employees and
self-employed persons affected by coronavirus

(estimated cost: $30 billion)

 

Persons undergone involuntary severance

80% of last monthly salary, up to $16,000

6 months, max.

Underemployed persons

80% of the monthly loss of income due to underemployment, up to $16,000

6 months, max.

Persons put on unpaid leave due to pandemic

80% of regular daily wage, up to $535

180 days, max.

Persons not salaried due to mandatory quarantine

80% of average daily wage

Duration of absence due to mandatory quarantine

 

Providing employee salary allowance for companies

(estimated cost: $40 billion)

 

All companies

5 times of the employer’s MPF contribution of the proceeding two months (whichever lower)

April to June, extendable if condition persists

 

Covering the salary expenses for employers affected by the lockdown

(estimated cost: $20 billion)

 

Employers affected by lockdown

All salary expenses during closure

Duration of the lockdown

 

Creating 50,000 temporary jobs

(estimated cost: $6 billion)

 

Job-seekers

50,000 temporary jobs

6 months

 

The total cost of all initiatives is estimated to be about $78 billion