China’s New “Two Child” Policy Changes Employee Benefits

Against a background of decreasing birth rates and an increasingly ageing population, the Chinese central government has ended China’s one child policy, replacing it with a new “two child” policy.

The amendment to the Population and Family Planning Law of the People’s Republic of China 2016 (“2016 Amendment”) came into effect on 1 January 2016 and implements key changes to employee benefits, reflecting new government policy. Broadly speaking (and subject to local rules), the amendments have removed previous employee entitlement to extra benefits on “late” marriage and child birth, replacing these with extended parental leave on the birth of a first and second child.

All previous local subsidies awarded to couples with only one child (and who have a certificate confirming their status as one child couples) have also been scrapped. However, this amendment is not retrospective and couples who obtained a certificate before 1 January 2016 retain their entitlement to any local subsidies.

What has changed?

Since implementation of the 2016 amendment, many regions have updated their local regulations in relation to population and family planning, including Shanghai, Guangdong and Shenzhen, with Beijing expected to follow suit shortly. In additional to national legal requirements, companies should be careful to check local regulations which also apply. These regional variants represent additional leave entitlement on top of the statutory minimum (detailed below).

Paternity leave is not granted under national law, but is dealt with solely through local regulations.

Basic maternity leave

Statutory maternity leave under national law (Special Provisions on Labour Protection of Female Workers 2012) is as follows:

  • 98 days maternity leave, 15 of which can be taken before birth;
  • an additional 15 days for difficult births;
  • an additional 15 days for each additional child in cases of multiple births.

Please note that all references to time periods are for consecutive, continuous days and include both working and non-working days – this leave entitlement cannot be split.

Key regional changes

Click here to view table.

What should you do?

In light of the recent changes, all companies should carefully review employee handbooks and internal HR policies and revise these documents as necessary to ensure compliance with national and local law (bearing in mind that local law may be further amended). Companies should also start resource planning to take into account the impact of extra employee parental leave.