On December 2, 2011, the Ministry of Human Resources and Social Security (MHRSS) released the Circular on Several Matters concerning the Better Enforcement of Social Insurance Programs for Expatriate Employees in China (Circular No. 113, the “Social Insurance Circular”), urging PRC companies to complete registration of their expatriate employees in China’s social insurance schemes. The Social Insurance Circular came two months after MHRSS released the Provisional Measures for Foreigners Working in China to Participate in the Social Insurance System (the “Provisional Measures”), formally initiating the social insurance program for all expatriate employees working in China from mid-October.
According to the Social Insurance Circular, starting from Oct 15, 2011, companies must contribute social insurance (i.e., pension, medical insurance, work-related injury insurance, unemployment insurance and maternity insurance) premiums in RMB for all expatriate employees working in China. For the purpose of such contributions, companies should first enroll their expatriate employees with the local human resource and social security bureaus (BHRSS) before December 31, 2011, otherwise they will be fined a late fee due from October 15, 2011. The Social Insurance Circular also urges local BHRSS to strictly enforce the social insurance program, and to guarantee to include all expatriate employees in the social insurance program.
In response to the Social Insurance Circular, Beijing’s local BHRSS issued a separate circular on December 15, 2011, clarifying that a late fee equaling to 0.05 percent of the employer’s unpaid social insurance premium will be charged for expatriate employees who are registered after January 1, 2012.
In Shanghai, however, which boasts a large expatriate population and also many foreign enterprises, no implementing rules have yet been issued in response to either the Provisional Measures or the Social Insurance Circular. According to the still-in-effect rules issued by Shanghai BHRSS in October of 2009, companies are discretional in contributing social insurance premiums for their expatriate employees; only three types of insurance, i.e., the pension, basic medical insurance and work-related injury insurance, are applicable to expatriate employees. In Shenzhen, since the Provisional Measures took effect, companies are now required to pay for their expatriate employees' pension insurance, medical insurance (including the maternity insurance) and work-related injury insurance, and they may contribute work-related injury insurance for expatriate employees at their own discretion. At present, inconsistent with the Social Insurance Circular and Beijing rule, the late fee will not be charged in either Shanghai or Shenzhen.
With regards to the expatriate employees who are already covered by social insurance programs in their home countries, the Social Insurance Circular provides an exception only for those employees whose home country has executed a bilateral or multilateral treaty with China. To date, only Germany and South Korea have entered into such treaties with China. Employees from those two countries and their employers are exempted from contributing social insurance premiums if they can submit evidence attesting to their contribution in the social insurance scheme in their home countries.
- Circular on Several Matters concerning Better Enforcing the Social Insurance Programs for Expatriate Employees in China
- Issuing Authority: Ministry of Human Resources and Social Security
- Date of Issuance: December 2, 2011 / Effective date: December 2, 2011