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China Law Insight

Labor & Employment

Shared Benefit or Shared Burden? Provisional Measures on Social Insurance for Foreigners Working in China

Posted in Labor & Employment

By Xu Xiaodan King & Wood’s Labor Group

The Provisional Measures on Social Insurance for Foreigners Working in China (the "Provisional Measures ") were issued on September 6, 2011 by the Ministry of Human Resources and Social Security and will come into effect on October 15, 2011. The Provisional Measures provide more specific rules on the requirement that foreigners working in mainland China should participate in the PRC social insurance scheme as stipulated in the PRC Social Insurance Law (promulgated on August 28, 2010, and came into effect on July 1, 2011). The Provisional Measures serve as a supplement to the provisions of the PRC Social Insurance Law.

Highlights:

1. Where an employer registered in the PRC hires a foreigner, both the employer and the foreigner are obligated to contribute to basic pension insurance, basic medical insurance, work-related injury insurance, unemployment insurance and maternity leave insurance (the “Required Contributions”).

2.  Where a foreigner enters into an employment contract with an overseas employer and is seconded to work in a branch or representative office registered in China (the “Domestic PRC Office”), the foreigner must also participate in the Required Contributions, and the Domestic PRC Office and the foreigner must pay insurance contributions in accordance with PRC law.

3. Where an entity registered in the PRC hires a foreigner, or accepts a foreigner seconded by his/her overseas employer, the entity registered in the PRC shall handle the social insurance registration for the foreigner within 30 days of obtaining a work permit.

4. As to a foreigner who participates in the PRC social insurance scheme, if he/she meets the required conditions, he/she will be entitled to social insurance benefits in accordance with PRC law.

5. Where a foreigner departs China before reaching the age eligible for receiving pension payments, his/her social insurance account will be kept, and his/her contribution years will continue to accumulate once the foreigner comes back to work in China in the future.  Alternatively, if the foreigner applies in writing to end his/her social insurance, the balance of his/her social insurance account may be paid to him/her in a lump sum.

6. Upon death, the balance of a foreigner’s social insurance account may be inherited.

7. A foreigner who receives monthly PRC social insurance benefits while outside China must submit a Certificate of Life to the social insurance agency that is responsible for paying him/her social insurance benefits.  This Certificate of Life must be submitted at least once a year, and needs to be issued by a PRC embassy or consulate, or notarized and certified by relevant authorities in the country where he/she resides and certified by a PRC embassy or consulate.

Where a foreigner enters into China legally, he/she may go directly to the social insurance agency to prove his/her life status, and a Certificate of Life mentioned in the above paragraph is not required.

8. Where a foreigner who participates in social insurance has a dispute with his/her employer or the Domestic PRC Office regarding social insurance, he/she may apply for mediation or arbitration or bring a lawsuit in accordance with PRC law.  Where the employer or the Domestic PRC Office infringes upon the foreigner’s right to social insurance, the foreigner may also request social insurance administrative departments or social insurance collection agencies to resolve the dispute in accordance with PRC law.

9. If a foreigner working in China is a citizen of a country that has entered into a bilateral or multilateral treaty regarding social insurance with China, his/her social insurance will be dealt with in accordance with that treaty.

10. Social insurance agencies will issue social security numbers for foreigners and distribute PRC social security cards to them in accordance with the Rules of Establishing Social Security Numbers for Foreigners.