Social security now extends to foreign employees

Nov. 3, 2011 -- Foreign employees now need to pay social security, according to China's latest social insurance law. Local governments are required to implement this by the end of this year.

Once the authorities work out the details, more than 230,000 foreigners will be included in China's social security program, meaning they need to pay a contribution for pension, medical, unemployment, working injury and maternity insurance.

According to the information available, an expat who has worked in China more than six months needs to pay the social insurance.

The new law has caused a stir among foreigners. Many worry they won't receive the benefits, although they and their companies pay for the insurance every month.

For instance, a foreigner who loses a job in China instantly loses the right to live here, and it is unclear how he or she is going to benefit from the unemployment insurance and retirement pension.

Those complaints are natural - the Chinese employees are much more critical about flaws in the social security program and the rigid pension fund management due to the hukou system.

But the imperfect system should not eclipse the necessity for foreigners being included in the system, nor should it justify the rejection. In the US and Europe, it is a common practice that social insurance is levied on foreign workers based on the same standards for local employees.

Though they usually enjoy higher salaries, foreigners think that since they don't have regular social welfare contributions both in China and at home, this means they cannot have a guaranteed pension fund for retirement.

Many also see the new law negatively, holding that the new rules raise labor costs for companies doing business in China. Some criticize the new rules hit foreign firms in the wallet, only to fill a deficit in China's domestic social security scheme.

For Chinese companies that hire foreigners, they also need to pay contributions on top of the payments made by the employees. Chinese and expatriate workers at a same company also hold the same obligations and rights in regard to the social security program.

The government should accelerate its welfare reform, so as to let Chinese and expatriate members included enjoy services and benefits.

As to the social insurance levied on foreigners, the authorities should coordinate among different departments and remove technical problems, like the conflicts between work permits and unemployment insurance.

Source: Global Times

Related Articles

Director-General of UNESCO visited Zhejiang University

New institute to improve China's communication abroad

Budget airlines launches Beijing route

Velvet bird of old Beijing