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The Interim Measures on Participation in Social Insurance by
Foreigners Working in China ("Interim Measures")
were issued by the PRC Ministry of Human Resource and Social
Security on 6 September 2011 and came into force on 15 October
2011. According to the Interim Measures, foreigners working in
China are obliged to participate in the PRC social insurance
scheme.
In practice, so far, the Interim Measures have not been fully
implemented by local governments in many places. However, on 18
January 2012, the Suzhou Human Resource and Social Security Bureau
("Suzhou HRSSB") issued a Notice on Implementing the
Work of Participation by Foreigners Working in Suzhou in the Social
Insurance Scheme (
苏人保规 [2012] 1
号 , "Suzhou Notice"), which expressly requires
that all foreigners working in Suzhou shall participate in the
social insurance scheme. The details are as follows:
1. As of 18 January 2012, all foreigners working in Suzhou,
shall participate in the PRC social insurance scheme, which
includes five types of the social insurance, i.e. the pension,
medical, work-related injury, unemployment and maternity insurance.
Please note that the administrative area of Suzhou covers Suzhou
City, Zhangjiagang City, Changshu City, Taicang City, Kunshan City
and Wujiang City ("Suzhou"). The contribution rates and
the calculation basis of the social insurance contributions
applicable for foreigners are the same as those for Chinese
employees.
2. Foreigners who have been working in Suzhou before 15 October
2011 shall pay social insurance contributions to the social
insurance funds starting from October 2011. In other words,
contributions shall be made up retroactively by foreigners for the
period starting from 15 October 2011.
The retroactive contributions for these foreigners shall be made
as follows:
Status
Retroactive Contribution
Calculation Basis
Foreigners who have already participated in the social insurance
scheme before October 2011
Make up contributions for unemployment and maternity insurance
from the commencement of their employment (at the earliest October
2011) until participation
Original calculation basis
Foreigners who did not participate in the social insurance
scheme but will participate by 29 February 2012
Make up contributions for all five types of social insurance
from the commencement of their employment (at the earliest October
2011) until participation
Actual monthly salary (capped at three times of the average
monthly salary of employees of Suzhou, i.e. currently
RMB11,392)
Foreigners who have not participated in the social insurance
scheme by 1 March 2012
Make up the contributions for all 5 types of social insurance
from the commencement of their employment (at the earliest October
2011) until participation
To be determined according to the relevant rules
Please note that according to the explanation of the Suzhou
HRSSB, if a foreigner working in Suzhou fails to participate in the
social insurance scheme before 1 March 2012, the calculation basis
applicable for the calculation of the retroactive contributions
might be higher than the currently applicable standard. Until now,
the Suzhou HRSSB has not yet decided to impose late payment fees or
penalties on enterprises who fail to make social insurance
contributions for their foreign employees within the time limit.
But this might change in the near future.
3. The Suzhou Notice does not mention the treatment of German
employees who can obtain an exemption certification in accordance
with the Sino-German Social Security Agreement. According to the
explanation of the Suzhou HRSSB, as long as a German employee can
provide an exemption certificate, he/she can be exempted from
participating in the pension and unemployment insurance. However in
some areas such as Taicang, due to their computer system, in
practice, currently a German employee may be exempted from all five
types of social insurance if a relevant certificate is
provided.
This article was written for Law-Now, CMS Cameron
McKenna's free online information service. To register for
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give professional or legal advice. All Law-Now information relates
to circumstances prevailing at the date of its original publication
and may not have been updated to reflect subsequent
developments.
The original publication date for this article was
21/02/2012.
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