1. Social insurance treaty signed between China and Japan to reduce the burden of social security contributions in both countries
Following the conclusion of similar treaties with Germany, South Korea, Denmark, Finland, Canada, Switzerland, the Netherlands, France, Spain, and Luxembourg, China has recently executed a bilateral treaty with Japan. According to the agreement, Japan will waive the obligations of dispatched employees, crew, flight attendants, diplomatic consular agencies and civil servants of Chinese invested enterprises in Japan to pay pension insurance and national pensions. Conversely, China will waive the obligation of the above-mentioned personnel from Japan to pay employee's basic pension insurance in China.
The treaty was entered into to address the double social insurance charge for nationals of a home country whilst in a host country, protecting the social security rights of these nationals, and relieving certain burdens for both employers and employees. In addition, the signing of the agreement is intended to further facilitate economic, trade and personnel exchanges between China and Japan.
2. Changes to housing contribution rates for employers to ease economic costs
Contributing to housing funds for employees is mandatory for employers in Mainland PRC. This non-tax payment, which can reach up to 20% of the employee's salary, is a significant economic burden on employers. In order to ease that burden, on 28 April 2018, the Ministry of Housing and Urban-Rural Development and the Ministry of Finance, together with the Central Bank, jointly issued the Notice on Further Improving the Housing Fund Contribution Scheme to Reduce Enterprises' Costs (the "Notice").
The Notice states that the contribution basis of housing funds should not exceed three times the monthly average salary in the previous year, as announced by the statistic department of the metropolitan city where the employer is located. The contribution rate of the housing fund must not be lower than 5% of the monthly salary and must not be higher than 12%.
In addition, employers experiencing difficulties in production and business operation, may, upon discussion with the employee representative assembly or the trade union, apply for a reduction in the contribution rate or postponement of housing funds. The reduced contribution rate shall not be less than 5% of the monthly salary.
The Notice will be gradually implemented between now and 30 April 2020. As far as we know, various regions and municipalities throughout the country will successively issue detailed rules to implement the requirements of the Notice. We will continue to pay attention and provide the latest news.
3. Jiangsu Province issued regulations requesting employers to take measures to protect female employees from sexual harassment and strengthen labour protections for female employees in certain situations
On 8 May 2018, the People's Government of Jiangsu Province issued Special Provisions on Labour Protection of Female Workers (the "Special Provisions"), which will take effect from 1 July 2018. The Special Provisions contain the following highlights and it is worth businesses in the region taking note: