Monday 30 November 2009
Shanghai first to offer social net to expatriates
The move means expatriates living and working in the city can receive coverage equal to that for locals over sick pay and bills for workplace injuries - so long as they pay into the system. Previously, the only option for companies with foreign employees was to take out commercial insurance.
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Shanghai first to offer social net to expatriates
Will Clem in Shanghai
24 November 2009
Shanghai has become the first mainland city to extend its social security network to foreign residents.
The move means expatriates living and working in the city can receive coverage equal to that for locals over sick pay and bills for workplace injuries - so long as they pay into the system. Previously, the only option for companies with foreign employees was to take out commercial insurance.
The new rules were introduced last month but not picked up by local media until yesterday after the city’s Human Resources and Social Security Bureau posted a notice on its website.
Overseas Chinese and people from Taiwan, Hong Kong or Macau are also eligible to be covered by the scheme.
Workers from overseas will also qualify for the city’s pension when they reach retirement age - 55 for women, 60 for men - if they have been making payments for a “specified period”.
However, the notice did not indicate how many years’ payments would be necessary to qualify.
In an interview with the Shanghai Daily, Sun Hande, director of the bureau’s overseas workers’ employment office, said the scheme would not be compulsory.
“Qualified people can choose to join the system or not. The new policy provides them with another choice to work under a more secure environment,” Sun said.
The scheme showed “great equality” to foreign workers if they “pay the same and get the same as their Shanghai-native counterparts”, he added.
According to the bureau’s website, employers would pay up to an additional 37 per cent of wages in social security charges - for pension, medical, unemployment and other programmes - while employees’ contributions would go up to 11 per cent of wages, and would start from 1,975 yuan (HK$2,240) a year and be capped at 9,876 yuan.
For migrant workers who come from other regions and in the municipality’s rural suburbs, contributions are a flat rate of 1,975 yuan.
Foreign workers leaving Shanghai before reaching retirement age would be entitled to withdraw their contributions from the social security fund, the notice stated.
While it would fund medical payments in other parts of the mainland, medical costs incurred overseas would not be covered.
Chris Prosper, managing director of SearchBank China, said he welcomed the news.
“I think that is excellent,” he said. “But I would need to investigate how the payments would be arranged and what the benefits would be before switching over.”
He said he would be keen to see how joining the scheme would affect maternity payments.
“For local employees, we only need to continue paying their social security contributions, and the fund pays for their maternity pay,” he said. “If an overseas employee takes maternity leave, we have to foot the whole bill.”
According to the human resources bureau’s statistics, there are about 68,000 expatriate workers in Shanghai, plus 25,000 from Taiwan, Hong Kong and Macau.
The figure is considerably higher when dependents are included - a total of 147,826 at the end of last year, according to the bureau statistics.
That figure has increased by more than half since 2005.
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