China Frontline August 2021: Three-Child Policy

On 20 August 2021, the National People’s Congress Standing Committee voted revise the PRC Population and Family Planning Law (“Family Planning Law Amendment”). The Family Planning Law Amendment allows Chinese couples to have three children. The revised law also stipulates that the country will take supportive measures, including those in finance, taxes, insurance, education, housing and employment, to reduce families’ burdens including the cost of raising and educating children.

1. Background to the three-child policy

In 2020, China witnessed its fourth consecutive drop in annual birth rate. The fertility rate was 1.3 children per woman in 2020, which is far below the replacement level of 2.1. By 2050, demographers predict that people over 60 could make up one-third of the country’s total population. A shrinking working age population and a growing retired population would hamper China’s economic growth and strain social services. By announcing the three-child policy, the Chinese government hopes to address the country’s plummeting birth rates and stop the ageing of its population.

It is indisputable that China's economic development has always been inseparable from its unique human resource advantages. A dense population provides the country's economy with a large amount of labour resources, consumer power, and innovative sources. The Chinese government considers that relaxing the birth control policy would be the easiest and most direct solution to China’s shrinking labour pool and rapidly ageing population.

2. Amendments of the Law and Announcement of Supportive Measures

1) A couple now can have three children

The Family Planning Law Amendment stipulates that all Chinese couples will be allowed to have up to three children. The law continues to be referred to as a “family planning” law since China's population still has numerous structural problems of gender and regional imbalance. The government considers that “family planning” is still needed to regulate and control the population in remote and poor areas.

2) Elimination of social maintenance fee and penalties for the birth of multiple children

The Family Planning Law Amendment indicates that the social maintenance fee will be abolished and all provisions that are not compatible with the three-child policy will be removed. Furthermore, the national legislation will no longer contain penalties, even for families giving birth to four or more children. Three legal provisions related to the social maintenance fee will also be revised or abolished, namely Measures for Administration of Collection of Social Maintenance Fees《社会扶养费征收管理办法》, Administrative Measures for the Family Planning Work in Respect of the Floating Population《流动人口计划生育工作管理办法》 and Administrative Regulations on Technical Services for Family Planning《计划生育技术服务管理条例》.

3) Support for the establishment of parental leave

Several regions have already issued policies regarding the establishment of parental leave. In 2019 and 2020, Ningxia and Fujian Province issued Measures to Protect the Rights and Interests of Female Workers, aimed at encouraging employers to give 10 days of parental leave each year to couples with children under three years of age. Other provinces like Guangdong and Liaoning are also exploring similar regulations.

The Family Planning Law Amendment now provides that the government will, where conditions permit, support cities in carrying out pilot programs for parental leave and perfect the mechanism for the sharing of labour costs during holidays.

4) Introduction of new provisions to protect the legitimate rights and interests of women in employment

The Family Planning Law Amendment continues to stipulate that women may enjoy special labour protection as well as help and compensation during pregnancy, fertility and breast-feeding periods, and further specifies that China will guarantee female employee’s legitimate rights and interests in employment. Certain employment services will be provided for women whose employment is affected by childbirth.

5) Guarantee of the rights and interests of families that have practiced family planning

The Family Planning Law Amendment states that China will continue to implement the current incentive and assistance measures and preferential policies for families that have practiced family planning.

For families that are entitled to rewards and assistance for the elderly during the period of the one-child policy, the state will continue to give them the necessary priority and care in respect of elderly welfare and public services, etc.

For families with one child, if the only child is disabled or dies in an accident, a comprehensive support and protection system will be established and improved.

6) Improvement of care services for infants and young children to reduce families’ burdens

The Family Planning Law Amendment adds lots of new content to reduce families’ burdens of raising and educating children, including developing an inclusive childcare service system, and supporting kindergartens, institutions, enterprises and communities to provide childcare services. It also stipulates that maternal and infant facilities should be provided in public places and in workplaces with a large number of female workers, so as to provide convenient conditions for the care and breastfeeding of infants.

3. Potential impacts upon the employers

1) Avoiding discrimination against female applicants when recruiting

PRC regulations stipulate that employers are prohibited from asking applicants about their marriage and maternity intentions during recruitment. More importantly, employers should avoid discriminating against and treating female applicants differently based on their marital status and maternity intentions.

2) Updating company’s internal rules

In light of the Family Planning Law Amendment, employers should revise their internal rules or employee handbook. For example, the maternity leave and parental leave provisions should be updated.

3) How to deal with employees who have more than three children is unclear

The abolition of the social maintenance fee and administrative penalties regarding childbirth seems to imply that Chinese couples are permitted to give birth to four or more children.

Further, the legislation does not specify how an employer should deal with employees who have more than three children. It is advisable to keep a close eye on judicial developments which may clarify on questions such as whether maternity leave should be granted to employees who have more than three children, and how maternity insurance will be calculated and paid in the future.

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