Human Resources & Payroll

Severance Payments in China: How the Abolition of Circular No. 481 Impacts Employers

Posted on by

By Hazel Wang
Editor: I-Ting Shelly Lin

On November 24, 2017, the Ministry of Human Resources and Social Security (MHRSS) invalidated a number of guidelines for employers in China.

Among them, the Measures on Severance Payment for Breaking or Terminating Labor Contracts (Lao Bu Fa [1994] No. 481) (referred to as “Circular No. 481”). Circular No. 481 had been in effect for over 20 years, serving human resource (HR) practitioners as the legal basis for severance payments and recuperation-period medical subsidies.

How did the abolition of Circular No. 481 impact employers?

Continue reading…

China Individual Income Tax and Social Insurance Calculator

Posted on by

By Dezan Shira & Associates

Individuals working in China – both Chinese and foreign – are required to pay individual income tax (IIT) on their earnings.

Chinese citizens must pay IIT on all income sourced both domestically and overseas (unless stipulated otherwise in a tax treaty), while in most cases foreigners are only required to pay IIT on income derived in China.

Continue reading…

Shanghai Residency Rules: Ban on Overseas Residency Suspended

Posted on by

China-Regulatory Brief banner

 

Shanghai has backtracked on plans to implement a controversial rule that would require Chinese citizens who have settled abroad to renounce their Shanghai residency.

On March 13, the Shanghai government announced that it would enforce The Shanghai Permanent Residency Management Rule (the Residency Rule) starting from May 1, 2018. The Residency Rule has existed since 2003, but had not been consistently implemented in practice.

Continue reading…

Labor Dispatch in China: Definition, Scope, and Limit

Posted on by

By Dezan Shira & Associates

Labor dispatch is an alternative option for foreign-invested enterprises (FIEs) looking to hire Chinese staff. While the preparatory work for setting up entities in China may require the assistance of Chinese staff, it is necessary for foreign investors to obtain their local entity’s business license before formally hiring employees. Additionally, a representative office (RO) cannot hire staff directly, and their employees must be seconded from dispatch agencies.

Due to its flexibility and lower cost, labor dispatch has traditionally been one of the most popular ways hire employees in China. Dispatch agencies offer companies temporary workers for particular projects or a certain period of time. This is especially beneficial for businesses in seasonal industries or with project-based work, where the amount of labor needed is not consistent year-round.

Continue reading…

Structuring a Salary Package in China

Posted on by

By Dezan Shira & Associates

The structure of a salary package payable for each position in a China-based company should be given careful consideration. Certain employees need to be incentivized, while other roles require a more fixed form of salary.

Furthermore, the employer should consider the amount of income tax that will be payable by the employee based on the proposed salary package. This is particularly important if the company offers a net salary package to its employees.

Continue reading…

Registering for Social Insurance and the Housing Fund in China

Posted on by

By Dezan Shira & Associates

Although both employee and employer make contributions towards the social insurance funds in China, it is generally the case that the employer is responsible each month for withholding the contribution of the employee from gross salary, and making the employee’s contribution together with that of the employer.

When hiring a new staff member, employers need to register him or her with the local Social Insurance Bureau and the Housing Fund Bureau. As each city or region regulates its own social insurance scheme, the procedures vary per city and change rapidly. Below, we describe how this procedure generally works.

Continue reading…

Sexual Harassment in China: What Employers Need to Know

Posted on by

By Ramya Bodupalli and Alexander Chipman Koty

The #MeToo movement has exposed sexual harassment and inappropriate behavior around the world, and China is no exception. In China, university campuses have been the focal point of the movement, with students publicly accusing several high-profile university professors of sexual harassment.

Sexual harassment in China, however, is not limited to university campuses. According to one report by Hong Kong’s City University, 80 percent of Chinese women experience sexual harassment at some point in their working lives.

The #MeToo movement has begun to expose the prevalence of sexual harassment in workplaces and other institutions. Given the pervasiveness of sexual harassment in the Chinese workplace – as well as the lack of state support for victims – businesses are finding it crucial to develop formal processes to handle such issues, while those with existing mechanisms are reevaluating and strengthening their systems.

Continue reading…

Transit Visa Exemptions in China: 24 Hour, 72 Hour, and 144 Hour Options

Posted on by

By Dezan Shira & Associates

China Visas

Foreign travelers transiting through China have several options for transit visa exemptions. These transit visa exemptions allow eligible foreign travelers a visa free visit for 24, 72, or 144 hours.

Although requirements for each transit visa exemption are different, each transit visa exemption stipulates that foreign travelers are only eligible when traveling through China between two different countries. Further, onward travel must occur within 24, 72, or 144 hours of arrival.

Continue reading…

Dezan Shira & Associates

Meet the firm behind our content. Dezan Shira & Associates have been servicing foreign investors in China, India and the ASEAN region since 1992. Click here to visit their professional services website and discover how they can help your business succeed in Asia.

News via PR Newswire

Never Miss an Update

Subscribe to gain even better insights into doing business throughout the China. Subscribing also lets you to take full advantage of all our website features including customizable searches, favorites, wish lists and gift functions and access to otherwise restricted content.

Scroll to top