Human security

New favorable social security policies issued for epidemic in China

To help enterprises overcome difficulties due to the epidemic, in April and May 2022, the Chinese government issued favorable policies on payment of social insurance contributions and contributions to the housing fund. Please find below a summary of the new policies.

The resurgence of the epidemic situation in China has caused confinements in several cities and impacted many companies. To help businesses overcome difficulties, in April and May 2022, the Chinese government issued favorable policies on payment of social insurance contributions and contributions to the housing fund. Please find below the summary of the new policies.

Defer payment of social insurance contributions

On April 25, the Ministry of Human Resources and Social Security and the State Tax Administration announced the Opinion on the temporary deferral of the payment of social insurance contributions in particularly difficult sectors. On May 31, 2022, the Ministry of Human Resources and Social Security, the National Development and Reform Commission, the Ministry of Finance and the State Tax Administration further jointly announced the Opinion on matters concerning the expansion of policies on the temporary deferral of payment of social insurance contributions (hereinafter the two notices are collectively referred to as “Social insurance policies”). We would like to summarize the policies as follows:

1. Companies suffering from operational difficulties in 5 particularly difficult sectors (catering, retail trade, tourism, civil aviation, road, river and rail transport) as well as in 17 sectors strongly affected by the epidemic (such as the automotive and textile industries , most of which are manufacturing industries and social and cultural industries) can request the deferral of the payment of the employer’s share of the pension fund during the period from April 2022 to the end of 2022 and of the employer’s share of health insurance contributions. unemployment and workers’ compensation insurance for the period from April 2022 to March 2023.

2. Medium, small and micro-enterprises, as well as public institutions and social organizations, foundations, social service agencies, law firms, accounting firms and other social organizations, which suffer from temporary difficulties of operation in places severely affected by the epidemic may request the deferral of the payment of the employer’s share of contributions to the pension fund, unemployment insurance and work accident insurance during the period of April 2022 at the end of 2022.

3. The above-mentioned enterprises may benefit from payment deferral processing after approval by the competent social insurance administrative authorities. But they must duly withhold and pay the employee’s share of social insurance contributions according to law. They must also catch up on deferred pension fund, unemployment insurance, and workers’ compensation insurance contributions within one month of the expiration of the deferral period. No late fees will be imposed on these companies during the deferral period. Employees’ unemployment insurance and workers’ compensation insurance benefits and other benefits related to unemployment insurance and workers’ compensation insurance will not be affected. However, during the deferral period, if an employee of these companies begins receiving pension benefits or changes jobs, the company must immediately make up the deferred payments from the pension fund. If a company decides to be dissolved, the company must catch up on deferred payments before delisting.

Defer payment of housing fund contributions

On May 20, 2022, the Ministry of Housing and Urban-Rural Development, the Ministry of Finance and the People’s Bank of China jointly issued the Notice on Support Policies for Temporary Deferral of Payment of Housing Fund Contributions (Jian Jin [2022] #45). According to this notice, companies affected by the epidemic can apply for the deferral of the payment of contributions to the housing fund until December 31, 2022 and then catch up on the deferred payments. During the deferred period, the normal withdrawal from the housing fund and the application for loans from the housing fund by employees are not affected. Detailed implementation rules will be subject to local policies.

So far, several places including but not limited to Beijing, Shanghai, Ningbo, and Hangzhou have issued local implementation rules. For example, in Shanghai, if a company is unable to duly and fully pay housing fund dues due to the impact of the epidemic, after consultation with the union or employee representatives, the company may apply for the postponement of the payment of housing finance contributions to the administrative center of the competent housing fund. However, if an employee changes jobs or withdraws from the housing fund by deregistering the housing fund account, the company will immediately make up the deferred payments. In Beijing, consultation with the union or employee representatives on the deferral of payment of contributions to the housing fund is not required when a company requests a deferral of payment. In addition, state and local policies do not specify whether the company can request deferral of payment of the employer and employee portions of housing fund contributions or only the employer portion of housing fund contributions. lodging. Therefore, if a company wishes to request the deferral of payment of housing fund contributions, the company can check its local policies in advance.