Economy

Social security set to cover foreign workers

By Shan Juan, Li Jing and Peng Yining (China Daily)
Updated: 2011-06-29 14:47

Foreign workers in China will soon be covered by the country's social security program, according to the Social Insurance Law, which will take effect on Friday.

The new law will allow foreign employees to receive medical, work injury, retirement, unemployment and maternity benefits similar to those for Chinese citizens.

Detailed regulations are yet to be published. In early June, the Ministry of Human Resources and Social Security solicited public opinion on a set of temporary measures for the program, which stipulates that all registered foreign workers with a valid work permit in China should be covered.

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About 600,000 foreigners lived on the Chinese mainland at the end of 2010, according to the latest national census. Approximately 231,700 had work permits, the ministry said.

Foreign workers employed by Chinese and overseas-funded enterprises, social groups, law firms and foundations that register in China, as well as foreign workers assigned to China by overseas-registered companies, are all subject to the coverage requirement stipulated by the Social Insurance Law.

Participation in the program means foreign workers' take-home pay will shrink, because part of their wages will be put into the pension fund, and that their employers' costs will increase.

Workers from countries that have signed social insurance agreements with China could be exempted from the program, said Xu Yanjun, deputy director of the ministry's social security center. So far, only Germany and the Republic of Korea have signed such agreements.

Internationally, such treaties are aimed to close gaps in social security coverage for people who migrate between countries. For instance, the United States has signed international social insurance agreements with 25 countries.

While the details have not been released, experts say the social insurance program for expats will be similar to the one that applies to Chinese citizens.

Currently, Chinese citizens (depending on the province they live in) pay at least 11 percent of their monthly income to social security - 8 percent to pensions, 2 percent for medical and 1 percent for unemployment. There are both lower and upper limits for the payment. A Chinese citizen pays 1,000 to 1,200 yuan ($154-$185) a month.