Yuhao Chang July 6 2022 Lockdown and reopening in Shanghai – guidance for employers JunHe LLP | Employment & Immigration - China Yuhao Chang Employment & Immigration IntroductionUnemployment rates and job market measuresIntroductionFollowing the largest covid-19 outbreak in China since early 2020, Shanghai went back into lockdown for two months, with control measures for businesses and citizens being lifted again on 1 June 2022.Two weeks into the reopening, several subdistricts and populated areas went back into lockdown after new covid-19 cases were reported. Meanwhile, in Beijing and other cities, partial lockdowns have also been ordered on several occasions over the past few months.During the Shanghai lockdown, Chinese leaders repeatedly vowed to stick to the "dynamic zero-covid-19" policy in order to suppress local outbreaks. This means that lockdowns and reopenings may become a typical pattern in China, which has created concerns for employers.This article is the first in a series that provides practical insights for employers in light of the dynamic zero-covid-19 policy.Unemployment rates and job market measures One of the significant side effects of lockdown, which was observed in early 2022, was the surging unemployment rate in urban areas. According to data released by the government, unemployment reached a 26-month high of 6.1% in April 2022 – the government's target is for less than 5.5% for 2022. The employment rate for 16- to 24-year-olds was reportedly at 18.2% in April 2022.On 25 May 2022, the national government held a national teleconference on stabilising fundamental parts of the economy. The teleconference was estimated to be attended by around 100,000 government officials nationwide, an unprecedented number. At this meeting the State Council highlighted the significance and need to protect market players in maintaining payrolls and public wellbeing. This will entail relief measures for employers to stabilise growth, including steps to expand the amount of tax relief and offer businesses deferrals in their payments of social security contributions. Local governments were urged to explore detailed policies and measures to help struggling businesses, stabilise payrolls and create more jobs in the second half of 2022.Most employment-related relief measures issued in 2020 still apply or have been extended to 2022 – for example, the lower rate for work-related injury insurance and maternity insurance contributions. On 29 May 2022, the Shanghai government announced relevant relief arrangements and plans, which cover:stabilising the job market;tax rebates;rent reductions;financial subsidies;resuming business operations; andstabilising the development of foreign-funded companies.According to the plan, businesses in the following sectors will be able to postpone paying social insurance premiums and housing provident funds to the end of 2022, among other reductions and exemptions in fees and taxes:catering;retail;tourism;civil aviation;transportation; andsmall, medium and micro enterprises.Similar recovery arrangements were also announced by other major provinces and cities in China between late May 2022 and early June 2022. More policies and actions are expected to be issued or implemented by local authorities in the latter half of 2022.For further information on this topic please contact Yuhao Chang at JunHe by email ([email protected]). The JunHe website can be accessed at www.junhe.com.