Beijing companies can cut social security, freeze minimum wages
December 18, 2008 | BY
clpstaff &clp articlesMore local governments to take similar protective measures
Companies in Beijing will be allowed to cut their contributions to employee social insurance funds in 2009, and the minimum salary will not be increased.
According to an official government news portal, the Ministry of Human Resources and Social Security has told Beijing that companies there should suspend minimum wage adjustments from early in 2009. The Beijing Bureau of Labor and Social Security has also announced that employer and employee contribution rates for funds including medical insurance, unemployment insurance and work-related injury insurance will be reduced.
The provinces of Zhejiang, Anhui, Guangdong and Suzhou have announced comparable measures, and further moves are expected.
“More and more local governments will take similar action in order to reduce the burden of enterprises when the economic situation becomes worse,” says Jeanette Yu of CMS Hasche Sigle Shanghai Representative Office.
But national legislation is unlikely, Yu adds.
“The State has authorised the local government to make decision at its own discretion according to their individual circumstances,” she says.
Social insurance contributions became compulsory with the introduction of the PRC Employment Contract Law. According to Yu, the latest developments show the determination of local governments to balance the execution of the Law while minimising burdens on employers.
This premium content is reserved for
China Law & Practice Subscribers.
A Premium Subscription Provides:
- A database of over 3,000 essential documents including key PRC legislation translated into English
- A choice of newsletters to alert you to changes affecting your business including sector specific updates
- Premium access to the mobile optimized site for timely analysis that guides you through China's ever-changing business environment
Already a subscriber? Log In Now