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Q: My company plans to send some employees to the USA for training. Can I prevent them from switching companies after having received the training?

    Yes, you can prevent them from switching companies after having received the training. Specifically, you may have these trainees sign a training agreement with your company, indicating that the trainees will pay all the costs related to the training if they switch companies within 2 to 3 years after they have completed the training. It would be better to have the training agreement, with all necessary signatures, notarized at a notary public office in China. Training agreements with reasonable terms have been upheld by Chinese courts.

Related FAQs From the topic Human Resources

  • 1.Are there any exceptions to the new rules?


    Under the old rules, the contribution was calculated based on the average monthly salary income of the participating employee from the previous year, therefore the higher the salary the higher the contribution. Since employers must match the contribution by the employee the enterprise must also set aside more money with increases in salaries. Contributions are tax free for individual income tax purposes.

  • 2.How do you best retain a talented workforce?


    There are many ways to retain talent. One way that is now making way also in China is the global stock option plans, which can be tailored to comply with Chinese regulations. Other forms that are used are supplemental benefits such as cafeterias, housing loans etc. Generally speaking however, the best tool is a strong corporate culture with clear succession and development plans for the individuals. Many times companies assume that finding talent is hard in China and therefore expensive, however many times the foreign company already has the necessary talent and it is simply a matter of discovering it. Discovering and developing talent however requires a structured process that strives to leave all employees happy.

  • 3.What are important topics in Human Resources (HR) with regards to China?


    Regarding China or other locations an important issue is getting the right people working on the right thing in the right way. This may be difficult using only the resources available. Many companies are stuck in that situation in China right now due to the global down turn and related downsizing. It is important to realize that in situations like this HR can work to raise efficiency and productivity.

  • 4.Which government body is responsible for the administration of employment law in China?


    The Ministry of Human Resources and Social Security. The ministry is responsible for formulating national human resource and social security policies. The Labour and Social Security Bureau, which sits beneath the ministry, is responsible for administering national and local regulations.

  • 5.What are the principal labour regulations in China?


    The Labour Contract Law of People’s Republic of China, (the Labour Contract Law) effective from January 1, 2008, amended on December 28, 2012) the PRC Labour Law (the Labour Law), effective from 1 January 1995 and amended on August 27, 2009, and the PRC Trade Union Law, promulgated on 3 April 1992 and amended on 17 October 2001 are the principal Chinese labour laws. The laws, which apply to all enterprises and economic organisations, address most employment issues including recruitment, contracts, wages, work conditions, occupational health and safety, and women in the workforce and labour dispute resolution.
    Under the Labour Contract Law, all employers and employees must execute labour contracts that define the parties’ rights and obligations and include the term, nature of the job, place of work, working hours, rest and leave, labour remuneration, social secruity, labour protection, working conditions and protection against occupational hazards, other matters which laws and statutes require to be included in employment contracts. Supplementary laws have also been issued for particular aspects of employment, including:

     

    • Interim Provisions on Labour Dispatch, adopted in 2014

     

    • Special Provisions on the Labour Protection of Women Employees, adopted in 2012;

     

    • The Regulations of the State Council Governing Working Hours for Workers, adopted in 1995;
    Labour practices vary between regions as provincial and local labour departments have fairly wide discretion in handling local labour matters.

  • 6.How can FIEs recruit local and foreign employees?


    FIEs may recruit Chinese employees directly or through local employment service centers. Foreign nationals, however, require approval from the local Human Resources and Social Security Bureau and the employer must demonstrate why local employees cannot fill the position or do not otherwise qualify. Expatriates should meet a range of requirements including academic degree, professional qualification, position and contract term etc.

  • 7.Is there a minimum wage requirement in China?


    The Labour Law provides a minimum wage requirement, which is determined at a provincial level. The Regulations on Minimum Wages (adopted in March 1, 2004) require all provinces, autonomous regions, and directly administered municipalities to set minimum wage standards and report them to the Ministry. Employers that fail to meet these standards may be ordered to compensate employees for the difference, pay other compensation, or both. Employers must also deduct and withhold employee individual income tax, social security and related payments.

  • 8.Are Chinese employees entitled to receive subsidies?


    Employers and employees must participate in the PRC social insurance system for unemployment, old age pensions, medical treatment, work-related injuries and maternity care. In addition to these mandatory subsidies, employers may also introduce incentive schemes such as bonuses or allowances. These incentives can refer to the related preferential terms and standard policies on business income tax and employee’s individual income tax issued by national and local tax offices

  • 9.What are the standard working times in China?


    The standard workweek is eight hours, five days a week.. Enterprises requiring different standards may, with the approval from the local labour administration, adopt flexible work systems.

     

    Restrictions apply to overtime work. Overtime may not exceed three hours per day and 36 hours per month. This may be longer under special circumstances and subject to agreement with trade unions and employees. Standard overtime wages are:

     

    • 150% of regular wage for overtime
    • 200% of regular wage for work on rest days
    • 300% of regular wage for work on statutory holidays

     

    Employees who have worked continuously for one year or more are entitled to paid annual leave. The amount of annual leave varies according to accumulated years of service, normally 5-20 days a year.

  • 10.Are there any employment restrictions that apply to local employees?


    Special laws protect various aspects of female employees such as maternity benefits. Employees between the ages of 16 and 18 are also protected under special occupational health and safety measures, including special procedures for hiring minors. Hiring children less than 16 years of age is strictly prohibited. Employers must also implement occupational health and safety programs in the workplace and conduct regular physical examinations for employees in hazardous environments.

  • 11.How can I terminate the employment of a local employee?


    Employment termination is complicated in the PRC and employers should exercise caution when terminating employees. Employers may dismiss employees without notice and economic compensation only when the employee:

     

    • is dismissed during the statutory probation period;
    • has seriously violated workplace rules;
    • causes great losses to the employer due to serious dereliction of duty, embezzlement or another criminal offence;
    • has additionally established an employment relationship with another employer which materially affects the completion of his tasks with the first-mentioned employer, or he refuses to rectify the matter after the same is brought to his attention by the employer; or
    • is being investigated for a criminal offence.

     

    Employers may otherwise dismiss employees by first giving 30 days’ notice or paying an additional month’s salary when the employee:

     

    • is unable to take up his original or any new work upon returning from non-work-related medical treatment for illness or injury;
    • is unqualified for his job and remains unqualified even after receiving training or an adjustment to another work post; or
    • is unable to agree with the employer, after mutual consultation, to modify his labour contract when the purpose for which he was originally hired was significantly changed or no longer exists.

     

    Employers may not dismiss employees when they:

     

    • are engaged in operations exposing them to occupational disease hazards and have not undergone a pre-departure occupational health check-up, or are suspected of having contracted an occupational disease and are being diagnosed or under medical observation;
    • suffer from a work-related sickness or injury that has been medically confirmed as having completely or partially caused the employee to lose the ability to work;
    • suffer from an illness or injury for which medical treatment within a specified period is allowed;
    • are pregnant, on maternity leave or within the specified period for nursing; or
    • Has been working for the employer continuously for not less than 15 years and is less than 5 years away from his legal retirement age;

     

    The Provisions Concerning Economic Redundancy in Enterprises (effective January 1, 1995) allow employees to be laid-off or dismissed for economic reasons, such as when the employer:

     

    • faces bankruptcy;
    • undergoes statutory reorganisation under the People’s Court order; or
    • falls into ‘serious operational difficulty’ as defined by the local government.

  • 12.How can my employee terminate his or her employment with my company?


    Employees generally may resign at will, but generally must give at least 30 days’ notice. During his probation period, an employee may terminate his employment contract by giving his employer three days’ prior notice.

     

    No notice is required if an employee resigns:

     

    • If an employer uses violence, threats or unlawful restriction of personal freedom to compel a employee to work;

    • If an employee is instructed in violation of rules and regulations or peremptorily ordered by his employer to perform dangerous operations which threaten his personal safety.

  • 13.How are labour disputes generally resolved in China?


    The PRC Labor Dispute, Mediation and Arbitration Law establishes the procedures for handling labour disputes. Under the dispute regulations, parties are encouraged to settle labour disputes by negotiation or mediation. If neither of these works, the parties must resort to compulsory arbitration before they may initiate legal proceedings.

  • 14.What are the requirements for foreign employees working in China?


    Foreign nationals may work in the PRC only after obtaining employment permits, employment certificates and residence certificates.

     

    Employment permits and employment certificates are exempt where they:

     

    • are a professional technician or management personnel employed directly by the Chinese government;

    • hold a Foreign Expert Certificate issued by the Foreign Expert Bureau and are employed by state authorities or public institutions;

     

    Employment permits are exempt where they:

     

    • have specialised skills working in offshore petroleum operations without the need to go ashore and hold a Work Permit for Foreign Personnel Engaged in Offshore Petroleum Operations in the PRC; or

    • engage in commercial activities with the approval of the Ministry of Culture and hold a permit to conduct temporary commercial activities.

  • 15.What legislation governs the employment of foreign employees in China?


    The Administrative Regulations on the Employment of Foreign Nationals in the PRC (amended in 2011)(the Provisions), promulgated on January 22, 1996, govern the employment of foreign nationals in the PRC (holders of Hong Kong, Taiwan and Macao travel documents are governed by the Administrative Regulations on the Employment of Hong Kong, Taiwan and Macao residents in Mainland China). The provisions require that an employer must prove that a ‘special need’ (defined as where there are requirements for a position for which there is a temporary shortage of suitable local candidates) exists before employing a foreign national.

     

    Foreigners without residency rights seeking employment in the PRC must:

     

    • be at least 18 years of age and be in good health;
    • have no criminal record;
    • have a confirmed prospective employer;
    • hold a valid passport or other international travel document in lieu of the passport; and
    • With professional skills and job experience required for the work of intended employment.

  • 16.Do the same employment laws and regulations apply to representative offices in China?


    Registered representative offices are subject to different regulations. All Chinese staff hired by representative offices must be employed from Chinese organisations authorized by the State to provide services to foreign enterprises. Direct private hiring is prohibited.

  • 17.Who is responsible for deciding and adjusting enterprise wage standards?


    Generally enterprises have full autonomy over their own wage system. They may determine their staff’s average wage level and wage increase with reference to the local workers’ average wage levels in the same industry. Competent local departments regularly release information such as wage guidelines and consumer price index for reference by enterprises.

  • 18.What are the components of workers’ wages?


    Workers’ wages generally include pay on time basis, pay on piecework basis, bonus, allowance and subsidy, over-time pay, and other payment for special duties.

     

    The following must be provided, but not included in workers’ wages:

     

    • Social insurance and welfare benefits, such as bereavement, poverty relief, and paid by the employer to individual staff;

    • Labour protection-related benefits, such as allowances on work clothes, detoxification agents and refreshing drinks;

    • Other labour remuneration not listed in the total payroll according to relevant regulations.

  • 19.Are there any special requirements when the enterprises pay their workers? If so, what are they?


    Yes, the enterprises shall pay in accordance with the following requirements when they make payments to employees.

     

    (a) Enterprises must deduct personal income tax and various social insurance fees from their workers’ wages and make payment for them.

     

    (b) Enterprises may reduce workers’ wages under the following rules and circumstances:

     

    • Specific stipulations in China’s laws and regulations;
    • Specific stipulations in labour contract signed according to law;
    • Specific stipulations provided in factory rules and disciplines formulated according to law by the enterprise and approved by workers’ congress;
    • Where the total payroll of the enterprise is linked with economic benefit, i.e. wages have to come down in tandem with falling economic benefit (but the wages for regular staff must not be lower than the local minimum wage);

     

    (c) Enterprises may delay wage payment in the following circumstances:

     

    • Enterprises cannot pay their workers on time because of force majeure such as natural disasters and wars;
    • Enterprises may temporarily delay paying their workers if they have cash flow problem due to difficulties in production and operation, but consent from the trade union is needed. The maximum grace period is subject to the regulations of the local provincial-level labour administrative department.

  • 20.Are there any minimum wage requirements?


    Minimum wage means the minimum remuneration an enterprise should pay to its workers who perform regular work within the prescribed working time. However, it does not include the following: overtime work payment; allowance for swing shift, night shift or work under special conditions such as high temperature, low temperature, underground, exposure to toxic or hazardous substances, staff insurance and welfare stipulated by the state, as well as non-cash benefit such as meal and housing allowances.

     

    The wages an enterprise pays to its workers must not be lower than the minimum rates promulgated by the local labour administrative department.

  • 21.How should companies pay overtime to employees?


    Enterprises extending working hours on a normal working day should pay workers for the overtime work, and the rate should not be lower than 150% of the worker’s hourly wage stipulated in the labour contract. Enterprises requiring workers to work on their off days without compensation in terms of time off should pay for the overtime work at a rate not lower than 200% of the worker’s daily or hourly wage. Overtime pay for statutory holidays should not be lower than 300% of the workers’ daily or hourly wage.

  • 22.What is social insurance under Chinese labour law?


    Social insurance is a mandatory, non-profit social security system established by law in China. It is administered by the Human Resources and Social Security departments.

     

    There are five types of social insurance in China: old age, medical, unemployment, work-related injury and childbearing. Among these, the premiums for old age, medical and unemployment insurance are jointly contributed by the enterprise and the individual, whereas work-related injury and childbearing insurance premiums are the sole responsibility of the enterprise.

  • 23.What are the social insurance responsibilities for enterprises?


    All enterprises must register with the local social insurance institution, participate in social insurance schemes and pay social insurance premiums on a monthly basis. The portion of premium payable by individual workers will be withheld and deducted from their salary and paid to the relevant authorities by the enterprises.

     

    If any changes in the social insurance registration details occur, due amendment must be made to update the record. In the event an enterprise ceases to be responsible for paying social insurance premiums because it has been dissolved, terminated, merged or gone bankrupt, it should promptly cancel its social insurance registration.

  • 24.What requirements exist for employing staff in a foreign representative office in China?


    In order to employ Chinese nationals in a Foreign Representative Office in China, the employer must obtain a registration certificate. In order to be granted this certificate, a number of formalities must be completed such as opening a bank account for foreign exchange, applying for direct telecommunication lines and securing a multiple entry visa for expatriate managers.

     

    NB: The minimum ratio of Chinese staff to foreign staff in a RO is 1:1.

  • 25.Will I need to go through the Beijing Foreign Enterprise Services Corporation in order to employ local Chinese staff in my Foreign Representative Office?


    Although a Foreign Representative Office must go through a designated employment agency, you will not necessarily have to go through the Beijing Foreign Enterprise Services Corporation. Employment formalities require that the Representative Office signs a contract with a service agency who will themselves sign a contract with the employee that it recommends.

  • 26.What is considered “unfair dismissal” in China?


    Unfair dismissal occurs when an employer terminates an employee for unfair or illicit reasons. In China it is illegal to dismiss a member of staff due to the following:

     

    • Pregnancy, nursing, or maternity leave

    • Receiving prescribed treatment for illness or injury

    • Suffering from occupational diseases or work related injuries

    • Claiming violation of rules but with no supporting evidence

     

    These are all types of “unfair dismissal”. A successful claim by an employee of “unfair dismissal” can result in restitution of damages for losses incurred by the employee.

  • 27.In the case of lawful dismissal, are there any types of compensation afforded to the dismissed employee?


    In the case of voluntary resignation by the employee, no compensation is afforded to the dismissed employee. In all other cases of lawful dismissal, an employee shall be paid severance pay based on the number of years worked with the employer at the rate of one month’s wage for each full year worked. Any period of not less than six months but less than one year shall be counted as one year. The severance pay payable to an employee for any period of less than six months shall be one-half of his monthly wages.

     

    If the monthly wage of a employee is greater than three times the average monthly wage of employees in the employer’s area as published by the People’s Government at the level of municipality directly under the central government or municipality divided into districts of the area where the employer is located, the rate for the severance pay paid to him shall be three times the average monthly wage of employees and shall be for not more than 12 years of work.

  • 28.Joint venture companies and wholly foreign owned enterprises enjoy independent legal person status. How does this affect the recruitment process?


    The result of this independent legal status is that such companies are afforded complete autonomy with regard to their employment decisions. For example, they may choose whom they employ, and what criteria to apply throughout the recruitment process

  • 29.In composing a contract of employment between employer and employee, what clauses must be included by law?


    In drafting a contract of employment, an employer must ensure that all the rights and obligations of the employer and the employee are clearly stipulated. Clauses that must be included are job description, and the place of work, working hours, rest and leave, labour remuneration, social security, labor protection, working conditions and protection against occupational hazards; and other matters which laws and statutes required to be included in employment contracts.

  • 30.Must the contract of employment be completed in Chinese?


    There are no specific stipulations in Chinese Law regarding the language of the contract, but it is advisable to create a bilingual document – one of the languages being Chinese; particularly as in case that all contracts must be verified by the labour authority that require the contract to be in Chinese.

  • 31.Does there exist a statutory probationary work period required by Chinese Law?


    According to Chinese Law, a probationary period automatically precedes a contract of employment. Nevertheless, this probationary period is not mandatory. If an employment contract has a term of not less than three months but less than one year, the probation period may not exceed one month; if an employment contract has a term of more than one year and less than three years, the probation period may not exceed two months; and if an employment contract has a term of not less than three years or is open-ended, the probation period may not exceed six months.

  • 32.Can I, as an employer, sign a probationary contract of employment with my prospective employees?


    According to Chinese Law, a probationary period automatically precedes a contract of employment, therefore a probationary contract will not be valid, and in the event of a dispute, this type of contract will be treated as a formal contract of employment.

  • 33.How would a claim for “unfair dismissal” proceed in a Chinese court of law?


    Under Chinese Law, any labour dispute, including those of unfair dismissal must initially go to arbitration. An application for arbitration must be filed within one year of the dispute. If either party wants to challenge the arbitral award granted, they must file a lawsuit within 15 days of receipt of the award.

  • 34.Is there any scope for Foreign Human Resource Enterprises in China’s business market?


    Due to its WTO commitments, China has allowed into its market Foreign Human Resource Service Enterprises.

  • 35.What pressures do companies in China often face?


    Externally there are industrial and community-relations issues. This includes stronger labour unions and more litigious employees, who now are less likely to hesitate to protest in cases of down sizing. Since companies are more and more expected to demonstrate social responsibility and corporate citizenship, it is important to implement changes well and promote good communication within the company. A good start is to receive expert labour law input when forming for example the joint venture and other contracts.

  • 36.How does one best improve workforce quality?


    This can be achieved through the elimination of underperforming employees as well as the utilisation of training and evaluation systems. Currently, because of lower hiring rates by multinationals, many highly qualified graduates are available, both Chinese and foreign. The problem with replacing staff with new graduates is the difficulties that are present in identifying new high performers. In this regard it is important to acknowledge that performance throughout a company needs to be tied to the business goals.

  • 37.I would like to hire a foreigner to work in my company. What are the relevant rules and guidelines concerning employment of a foreigner in China?


    Although the prospect of a foreigner working in China and the bureaucracy concerning such an action is formidable, it is possible and common for foreign workers to work legally in China. Firstly, a prospective employee must have no criminal record, be at least 18 years old and in good health, have a valid passport or other travel document, a clearly defined employer and the necessary professional skills required for the applied position. Unless the foreigner is working in an embassy, consulate, with the United Nations or other similar international organisations, in which case these formalities are not necessary, a foreigner will have to go through extensive paperwork and different state levels of bureaucracy.

     

    The position that the foreigner is applying to fill must be of a special need, one that cannot be satisfied by the domestic labour force. Once a suitable employer is defined, he or she will fill out the Application Form for the Employment of Foreigners, and submit this to the competent trade authorities of the specified region together with the employee’s C.V., a letter of intention of employment, the report of reasons for the employment, the credentials of the prospective employee, a health certificate of the employee and any other relevant documents required by regulations. The trade authorities will then examine the said documents and approve the application.

     

    Within 15 days after the employee enters China, the employer and the employee should go to the Certificate Office, with the employment license, a labour contract (maximum five years long), and the foreigner’s passport to fill out the Foreigner Employment Registration Form and receive an employment permit. This employment permit authorises the foreigner to work only in the area specified and to apply for a residence permit.

     

    Once the employee has begun working, every year there is an annual inspection of the employment permit. If the deadline is passed without the proper inspection, the employment permit is immediately revoked. If the foreigner’s residence status is revoked due to violation of Chinese law or if the contract is terminated, the employment permit is also revoked.

     

    A foreigner employed in China enjoys the same privileges as a China-born employee. This means at least a minimum wage, with working hours, hygienic standards, rest and vacation provisions all in accordance with the state standards. However, the freedom of a Chinese employee allows him or her to look for a job anywhere desirable, whereas a foreign employee must continue working within the specified area with the same employer. Any changes in the foreigner’s working situation may subject the Employment permit to being revoked.

     

  • 38.Are there any provisions regarding employee transportation to and from work? I know that some employers provide for such benefits, but is this mandatory? Also, if I do provide transportation, am I liable if someone gets injured?


    There are no mandatory requirements for employer-provided transportation. Your company does not need to provide this benefit to its staff.
    However, you might be making an incorrect assumption by thinking that there would be added liability if you provide such transportation. In fact, injuries that occur to employees on their way to/from work are regarded as work-related injuries under China law, irrespective of who provides the transportation. In other words, your company is already liable for these sorts of injuries so long as they occur to/from work. Providing transportation does not change this liability or add to it.

     

    According to the Work-Related Injuries Regulations, a work-related injury occurs if an employee is injured, handicapped, or killed in a traffic accident, due to a reason that is not attributable or mainly attributable to him, on his way to/from work during such hours that correspond to the business start and end times and by such route that he must reasonably take. Locally, the recently issued Beijing Work-Related Injuries Regulations also provide for the same definitions. The definition is thus fairly narrow. For example, let’s assume that an employee is going home after work and stops at a market on the way to purchase some yuanxiao. After leaving the market, he is hit by a car. Generally this would not satisfy the “such route that he must reasonably take” requirement of the regulation because he did not go directly home after work. Recently there are some extensive discussions by government and the public on whether accidents occurring on employee’s way to and from office should be regarded as work-related injuries. It is expected more specific rules will be launched in near future.

  • 39.Which issues should a foreign investor take into account when entering into labour contracts?


    There are many pitfalls involved in labour contracts. In general, one of the most important issues to take into account is the accuracy of an applicant’s CV. A way to do this is to ensure that the employer retains a right to revoke the labour contract in case the items on an applicant’s CV turn out to be false. Another important issue is to conduct physical examinations of new employees, both to ensure product quality and consumer health. Furthermore, training is vital in order to guarantee the necessary skills of the employees. A way to ensure that the training has been sufficient is for the employer to have a post-training test before the applicant can be formally employed. Finally, a labour contract must be signed, which stipulates the relationship between the employer and employee, either for a fixed or open period.

  • 40.I just set up a WFOE in China. How can I hire Chinese employees? Can I directly enter into labour contract with them or must hire employees via intermediary companies?


    To employ Chinese employees, you can directly sign a contract with them. Since JVs and WFOEs are established under Chinese law and regulations, they are considered as Chinese enterprises. According to Chinese laws and regulations, it is legal for Chinese enterprises to hire Chinese employees by directly entering into contract with them. There are no regulatory requirements in this aspect. However, for the representative offices of foreign enterprises, it is required that they hire employees via qualified intermediary companies such as FESCO and China International Interlectech.

  • 41.When restructuring a company, how do I transfer part of the employees into one of our affiliate companies? Do I need to compensate the employees for terminating them?


    In order to do this, you need to first terminate employment with the employees and then invite them to enter into another labour contract with the affiliate company. If they agree, then you do not need to pay them any compensation. However, you must make sure that the employees can enjoy the same or better benefits after being transferred to another company. If after the transfer, the employee benefits in the new company are actually inferior to those enjoyed in the former company, then they may refuse to enter into a labour contract with the affiliate company. In that case, according to related regulations, you must pay compensation for their unemployment.

  • 42.I terminated an unqualified employee recently. He seemed unsatisfied with the compensation I gave him and threatened to sue. Can you provide me some information as to how to settle labour disputes in China?


    According to Chinese law and regulations, there are four ways to settle the labour disputes: consultation, mediation, arbitration and litigation. Generally speaking, arbitration and litigation are the most helpful ways to settle labour disputes. The parties involved in the dispute can apply to the labour dispute arbitration committee for arbitration within one year from the date the dispute arises. The Labour Dispute Arbitration Committee will arbitrate the case and issue an arbitration award. However, this award is not final. If the relevant parties fail to agree to the arbitration award, they can file a lawsuit on the case to the relevant People’s Court, which will then make a final decision on the case. In China, the two parties involved in the dispute are not allowed to file lawsuits directly to the People’s Court. They must apply for arbitration first. So even though your employee threatened to sue you, he may actually mean that he will apply to the arbitration committee for arbitration of the case.

  • 43.What are the rules concerning housing fund contribution?


    The housing fund contribution scheme deals with the amount that an employer shall contribute to the fund. A circular was published in 2008, which has introduced changes to the scheme. The Beijing Municipal Housing Reform Office and Beijing Finance Bureau issued the circular, which modifies the base for determining the amount an employer can contribute to the fund. In the new circular the housing fund base is revised to three times the average monthly salary of all staff employed within the Beijing municipality area in the previous housing fund calendar year. The stipulated contribution rate is 12 %. The Beijing Local Census Bureau will revise the average monthly salary annually and the housing fund contribution is tax deductible.

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