Since the announcement of the two-child policy by the CPC in the 5th Plenary Session of the 18th CPC Central Committee in October 2015, on 27 December 2015, the Standing Committee of the People’s Congress voted to pass the Amendment for the Law of the People's Republic of China on Population and Family Planning and the two-child policy was officially implemented on 1 January, 2016.

The Amendment was mainly made on the implementation of the two-child policy. It encourages couples to have two children and cancelled the leaves for late marriage and delayed childbearing and mandatory birth control policy. Details are as follows: 

1. Implementation of the two-child policy

The Amendment changed the original “encouraging one couple to have only one child” to “encouraging one couple to have two children” and it stipulates that “if conforming to the conditions provided by laws and regulations, an application for bearing more children could be made”. At the same time, it also invalidated the policy of mandatory birth control and changed it to “couples at a bearing age could opt for voluntary birth control”.

2. Cancelled the leaves for late marriage and delayed childbearing and intends to reward couples conforming to birth policies

The Amendment neither encourages nor rewards late marriage or delayed childbearing. It stipulates that for couples having children in compliance with the policy, “reward for extending parental leave could be obtained”. That is to say, regardless of having one or two children, extension of parental leave will be given. According to tradition, rewards having not been provided for in the Amendment will be ascertained by local legislatures.

3. Cancelled the rewards for couples with only-child

According to the Amendment, for couples having only one child after the implementation of the Amendment on January 1st, 2016, they will no longer receive the Certificate of Honourable Parents of Only-Child. However, for couples who gave birth to only one child voluntarily during the period when the national law encouraged a couple having only one child, they are still qualified to receive the Certificate of Honourable Parents of Only-Child and are still entitled to relevant rewards and assistance (including rewards for the parents of only-child, assistance to parents who lost their only-child and rewards to the elderly in birth control families).  

Regarding the above substantial changes of law, we would like to give the following risk and compliance alerts to enterprises:

1. Internal policies might need to be adjusted

Enterprises will need to adjust internal policies based on the situation in question:

  1. Delete the provisions on rewards to couples with only-child.
  2. Delete provisions that employees are entitled to leaves for late marriage or delayed childbearing and relevant leaves and holidays depending on the circumstances and on right time.
  3. Insert the provision that “for local provisions offering more favorable parental leaves such as maternity leaves, such provisions shall prevail.”
  4. Amend provisions related to maternity allowance if necessary: “whether to give maternity allowance and the amount thereof should be referred to the current local provisions.”
  5. If original provisions provides that “having a second child” is misconduct, such provisions should not be applied and deleted. If the original provisions made “violating birth control policy” as misconduct, it is suggested that the description for such violations should be changed to “having a child in violation of the current birth control policy or in violation of the current Law of the People's Republic of China on Population and Family Planning”. Meanwhile, such a provision should be used carefully when dealing with employees and it is noteworthy that for a female employee having a third child or more, if the enterprise was not punished for the employee’s behavior, it is not advisable for the enterprise to punish the employee.

If the internal policies are amended accordingly, enterprises should implement the democratic and publicizing procedure to make the adjustments apply to all the employees.

2. The problem of maternity leave for female employees having a second child or more

  1. For employees having a second child: give statutory maternity leaves and rewarding leaves (local provisions prevail) and apply for the employee maternity allowance. 
  2. For employees having a third child or more: leaves shall be granted and specifically, unless there are local provisions, enterprises could implement the original policies and decide with discretion the category of leaves deserved (sick leave or personal leave) and the standard of salaries (sick leave salaries or no salaries)

3. More hires and attention to adjustments of payment of maternity allowance 

First and foremost, the two-child policy at full speed would trigger a small peak of childbirth. Enterprises with a certain ratio of female employees, consequently, will face the scenario that the time taken off by female employees for maternity leave will increase and certain positions may be short-handed. Foreseeing this possible situation, enterprises need to consider employing more employees in order to fill the gap of manpower created by the increased time taken off by female employees.

Secondly, with the increase of childbirth rate, the amount of birth allowance drawn from the social security fund will increase accordingly and the state might lift the ratio or base of birth allowance paid by enterprises. The time and level of the possible adjustment remains to be seen and it deserves attention from enterprises.

Conclusion

The two-child policy is merely the beginning.

China has deepened its birth control reform but it is uncertain whether any big changes may occur to the future of the policy. It is possible that enterprises will face more challenges in the future considering the current environment of stressing protection for female employees and the exponential growth of support from the state in encouraging childbirth. It is suggested that enterprises should stay awake on the forthcoming changes.