A new social insurance law that will apply to foreign employees from July 1 may make it significantly more expensive for companies in China to hire expatriates.
Patti Waldmeir writes in the Financial Times:
China’s first national social insurance law could require companies employing foreigners to pay up to Rmb4,324.56 ($667) per month in social insurance contributions, to pay for things like state medical insurance, pensions, workplace injury, unemployment and maternity insurance, according to employer lawyers.
Foreign employees might have to pay up to a further Rmb1,285.68 per month each in individual contributions.
If those details are true, businesses in China may find foreigners too expensive to justify hiring, and many of you reading this blog may start getting waved goodbye by your HR departments.
But if this is any consolation, many uncertainties remain. The new law could turn out to be voluntary instead of mandatory, and it remains unclear what they’ll do with Taiwan, Hong Kong and Macau nationals. While implementation in the short term is unlikely, most China-based employment attorneys the FT spoke to expect that inclusion of foreigners is inevitable in the long run.