Do You Know About the Changes in Beijing?
Your company may need to take action due to the changes in Social Insurance and Individual Income Tax (IIT) in Beijing. The Beijing Social Insurance Fund Management Centre has tightened regulations and this could have a significant impact on companies that:
- Have employees based in Beijing
- Have no registered entity/branch in Beijing
- Files social insurance and IIT for Beijing based employees via a third party
Previously companies without a local entity or branch in the city were able to hire Beijing locals through HR agencies. However, as of July 5th 2020, HR agencies registered Beijing are no longer allowed to dispatch local employees to companies registered in other cities or pay social insurance and IIT. HR agencies will have to conduct internal reviews and compliantly report certain information about employees under their service to the government.
Penalties for Non-Compliance
If this announcement applies to your company, corrective action will need to be taken. Employers who do not comply with the regulations will risk being fined, blacklisted, and could face legal proceedings. Employees affected by this will face disruptions to their social insurance and IIT filings and become unqualified for Hukou application.
Actions You Need to Take
For businesses without a registered presence in Beijing, the following can be considered to meet the new requirements:
- Set up an entity/branch in Beijing
- Changing your employment structure
- Consider using another HR partner for managed services, PEO or EoR arrangement in Beijing
If you would like to learn more about the new regulations and changes, feel free to contact us now. Links International’s expertise will ensure your compliance with regulations and help you find solutions to alternatives.
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Links International is an industry leader in innovative HR outsourcing with services such as payroll outsourcing, visa application, PEO/EOR Secondment, outplacement, recruitment and more! Contact us for more information on how we can help leverage your HR function.