China Labour Law Updates: August 2023

Are you aware of the latest labour law updates in China? We highlight the essential changes that took place in August 2023 that you should pay attention to across the key states in China!

1. The Maximum Amount of Severance Payments Increase

2. The Maximum Amount of Taxable Housing Provident Fund Increase

3. Latest Overtime Allowance Policy

Tianjin Municipality has recently issued a notice regarding the “Implementation Rules on Several Issues of Implementing the Labour Contract Law in Tianjin.” It elaborates on the calculation base and settlement period for overtime wages. Here are the key points:

• Employers and employees may agree on the calculation base for overtime and additional work wages in the labour contract, subject to the following principles:
  • The agreed calculation base for overtime and additional work wages shall not be lower than the remuneration the employee is entitled to for their respective position.
  • The calculation of remuneration shall not include remuneration paid over a period exceeding one month or with an uncertain payment period.

• In cases where there is no clear agreement or an unclear agreement in the labour contract between the employer and the employee:
  • The employer and the employee shall renegotiate on the agreement;
  • If no agreement is reached through negotiation, the provisions of the collective contract shall apply. In the absence of a collective contract or if the collective contract does not specify the calculation base for overtime and additional work wages, the base should be the remuneration the employee is entitled to after deducting the overtime and additional work wages.

• For employers who implement special working hours systems with permission, the employer and employees under the comprehensive calculation of working hours system may explicitly specify the settlement period for overtime and additional work wages in the labour contract. If not specified, overtime and additional work wages shall be settled according to the comprehensive calculation period.

4. The Work Injury Insurance

Beijing, Jiangsu, and Zhejiang provinces have all issued notices regarding the adjustment of work-related injury insurances and benefits for the year 2023.

Beijing Municipality

This adjustment applies to occupationally injured employees who were receiving disability allowances or deceased family who were receiving family allowances before December 31, 2022 (excluding retired individuals receiving basic old-age pensions).

• The adjustment for disability allowances for Grade 1 to Grade 4 work-related injuries will increase as follows, per person per month based on the disability grade: Grade 1 with an increase of RMB360; Grade 2 with an increase of RMB325; Grade 3 with an increase of RMB295 and Grade 4 with an increase of RMB265.
• Family allowances for the families of deceased workers will increase by RMB160 per person per month.
• Employers must increase the disability allowances for Grade 5 and Grade 6 work-related injuries for individuals not assigned to work. The monthly increase for each person must be no less than RMB170.

The adjustment for living care allowances will be announced separately once the base calculation is finalised.

Jiangsu Province

This adjustment applies to work-related injured employees who were receiving disability allowances and living care allowances, as well as families of deceased workers receiving family allowances, as of December 31, 2022. It also includes individuals who have completed retirement procedures as prescribed, with their basic old-age insurance benefits lower than the disability allowance, and they will receive the difference from the work-related injury insurance fund.

1. Disability Allowance
   • For work-related injured employees with disability grades ranging from Grade 1 to Grade 4, the adjustment will increase the disability allowance per month based on the original disability allowance standards: Grade 1 with an increase of RMB176; Grade 2 with an increase of RMB164; Grade 3 with an increase of RMB162; Grade 4 with an increase of RMB161.
   • For work-related injured employees with disability grades of Grade 5 to Grade 6 who were already receiving monthly disability allowances, employers will increase the disability allowance by 3.8% of the previous month’s disability allowance. The adjusted standard shall not exceed the monthly adjustment amount for Grade 4 work-related injured employees.
     
     
     
2. Living Care Allowance
   • For individuals who require full, significant, or partial nursing care and cannot care for themselves, the living care allowance will increase by 2.33% per month based on the original care expenses. After the adjustment, those whose living care allowance were lower than RMB3,920/month, RMB3,136/month, and RMB2,352/month will be adjusted to these standards.
     
     
     
3. Surviving Family Allowance
   • The surviving family allowance for the surviving relatives of deceased employees will increase by RMB50 per person per month based on the original standards.

Zhejiang Province

This adjustment applies to work-related injured employees who, as of December 31, 2022, were already eligible to receive disability allowances, surviving family allowances, and living care allowance, or were the surviving relatives of employees who died due to work-related incidents.

1. Disability Allowance
   • Fixed Adjustment: Eligible employees will receive monthly increases corresponding to their disability grade, ranging from Grade 1 to Grade 4, with increments of RMB422, RMB399, RMB375, and RMB352, respectively.
   • Minimum Standard Adjustment: After the fixed adjustment, if the disability allowance for Grade 1 to Grade 4 work-related injured employees remains below RMB4,037/month, RMB3,813/month, RMB3,588/month, and RMB3,364/month (or RMB4,218/month, RMB3,984/month, RMB3,749/month and RMB3,515/month in Wuhan), it will be adjusted to reach the corresponding standard.
   • According to Article 36 of the “Work Injury Insurance Regulations,” the disability allowance standards for Grade 5 and Grade 6 disability employees already receiving disability allowances have been adjusted. Grade 5 disability will increase by RMB329/month, and Grade 6 disability will increase by RMB282/month. After deducting personal social insurance fees, if the disability allowance falls below the local minimum wage standard for 2023, it will be supplemented accordingly.
     
     
     
2.  Surviving Family Allowance
   • For the spouses of deceased employees, there will be an increase of RMB202 per person per month, while other eligible relatives will receive an increase of RMB151 per person per month. For surviving relatives who are elderly and alone or orphaned, an additional RMB51 per person per month will be provided. If there are multiple surviving relatives of the deceased employee, the sum of additional survivors’ support benefits for multiple surviving relatives shall not exceed RMB504/month.
     
     
     
3. Living Care Allowance
   • In 2023, living care allowance for work-related injured employees who are completely unable to independently care for themselves, limited ability to care for themselves, or partially unable to care for themselves will be executed at standards of RMB3,738/month, RMB2,990/month, and RMB2,243/month (or RMB3,905/month, RMB3,124/month, and RMB2,343/month in Wuhan), respectively.
   • For those exceeding these standards, there will be no further adjustments for the current year. For those below these standards, adjustments will be made to reach the aforementioned standards.

5. New High Temperature Allowance

Starting from January 1, 2023, the high-temperature allowance in Tianjin City will be calculated based on the 2022 annual average monthly salary of employees, which is RMB7,919. This amounts to RMB43.7/ day.

RMB7,919 ÷ 21.75 days × 12% = RMB43.7

6. Regulations on Population and Family Planning

In the 14th People’s Congress Standing Committee of Hunan Province held on May 31, 2023, an announcement was made regarding the decision to repeal and modify certain local regulations. One of the decisions involves amending Article 21, Paragraph 2 of the “Hunan Province Population and Family Planning Regulations” as follows:

• Provincial, prefectural-level cities (autonomous prefectures), county (city, district) people’s governments shall establish and improve a comprehensive assistance and support system for plan-child families in extreme difficulties and couples who have obtained the “Honorary Certificate for Parents of Only Child” whose only child has suffered accidental disability or death, covering aspects such as livelihood, old-age care, medical care, and psychological consolation.
• The government shall provide assistance funds as stipulated; government-established elderly care institutions shall prioritize meeting the service needs, and designated medical and health institutions shall prioritize providing convenient medical services.
• Township (town) people’s governments and street offices shall appoint support contacts for families with disabled or deceased only children.

7. Day Care Subsidy

In accordance with the “Population and Family Planning Law of the People’s Republic of China” and the “Shanxi Province Population and Family Planning Regulations,” Taiyuan City in Shandong Province has implemented a notice regarding the reimbursement management of childcare and educational expenses. The details are as follows:

• Kindergartens may charge enrolled children for various fees, including childcare and educational expenses, accommodation fees, service charges, and miscellaneous fees. Provincial government departments may reimburse 50% of the childcare and educational expenses for children. However, accommodation fees, service charges, and miscellaneous fees are the responsibility of individuals.
• Childcare and educational expenses are reimbursed based on fiscal receipts or invoices. The reimbursement of childcare and educational expenses is jointly borne by the parents of the child. If one party cannot bear the cost, the other party will assume the responsibility. The maximum reimbursement period for childcare and educational expenses is 10 months per year.

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