The Interim Measures for the Participation in Social Insurance of Foreigners Employed in China (Draft for Comments) opens for Public Consultation

On June 10, 2011, China's Ministry of Human Resources and Social Security released to the public for solicitation of opinions of the "Interim Measures for the Participation in Social Insurance of Foreigners Employed in China (Draft for Comments)". The comment solicitation period for both draft measures ends on June 17, 2011.

The measure was formulated based on the Social Insurance Law, which is set to take effect on July 1, 2011. The key aspects of the Interim Measures are outlined below.

1. According to the Interim Measures, foreigners who are legally employed by enterprises, public institutions, social groups, privately-owned non-enterprise units, foundations, law firms and accounting firms which have been registered or recorded in line with the laws in China are required to participate in the following insurances: basic pension insurance, basic medical insurance, work-related injury insurance, unemployment insurance and maternity insurance. The employing units and foreigners should pay the social insurance premiums in accordance with relevant regulations. (Article 3)

For foreigners who entered into employment contracts with employers outside of China and are dispatched to work in branch or representative offices registered or recorded in China, they and the branch or representative offices are also required to pay the social insurance premiums in accordance with relevant regulations. (Article 3)

2. The Interim Measures provide that, where a foreigner departs China prior to the stipulated age for receiving pension, his or her individual account will be retained. Where the foreigner reenters China for employment, the payment period can be calculated cumulatively. Upon written application by the foreigner, the social insurance agency can pay the foreigner the amount in his or her individual account in one lump sum and terminate the basic pension relationship. Upon the foreigner’s death, the amount remaining in his or her individual pension insurance account can be inherited. (Articles 5 and 6)

3. The Interim Measures cover Chinese citizens who are citizens of the Hong Kong Special Administrative Region and Macao Special Administrative Regions, as well as citizens of Taiwan. These personnel as well as all foreigners legally employed in China will be issued social insurance cards and assigned social insurance numbers (Article 11).

4. For foreigners who are nationals of countries that have entered into bilateral or multilateral treaties relating to social insurance with China, his or her social insurance participation will be handled in accordance with such treaties (Article 9).

Since the promulgation of the Social Insurance Law in October 2010, there has been much debate and uncertainty as to the extent to which the Law applies to foreigners, and whether or not foreigner’s participation in social insurance would be mandatory. The draft Interim Measures clarify the government’s intent to include foreigners into China’s social insurance scheme.

However, the Interim Measures still do not lay out clearly when foreigners who have employments in China should start to participate in social insurance should start and the rates of contributions. How effective the Social Insurance Law applies to foreigners with employments in China remain to be seen.

Interim Measures for the Participation in Social Insurance of Foreigners Employed in China (Draft for Comments) in Chinese Language

Interim Measures for the Participation in Social Insurance of Foreigners Employed in China (Draft for Comments) in English Language