China Labour Law Updates: June 2023

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

1. The Maximum Amount of Severance Payments Increased

2. The Work Injury Insurance

Jiangsu Province has recently released an opinion aimed at enhancing the implementation of the “Regulations on Work-related Injury Insurance” and the “Measures for the Implementation of the Regulations on Work-related Injury Insurance” within the province. These guidelines, which will remain in effect from February 1, 2023, until January 31, 2028, are designed to facilitate the seamless execution of these regulations by all concerned parties.

This opinion provides clear definitions for various types of work-related injury determinations, as follows:

• Working Hours: The designated working hours stated in the employee’s labour contract or those specified by the employer, including any overtime work, will be considered as official working hours.
• Workplace Definition: The area where an employee carries out their duties, as well as reasonable areas between multiple workplaces associated with their job responsibilities, will both be recognized as workplaces.
• Work Accidents: Injuries sustained directly by employees during their working hours and within the workplace due to production and business activities, as well as accidental injuries incurred by employees while temporarily fulfilling reasonable and necessary physiological needs during work, will be classified as work accidents.
• “On the Way to and From Work” Situations: The following circumstances can be considered as “on the way to and from work”:
  i. Traveling between the place of work and the place of personal, spouse, parents or children’s residence within a reasonable timeframe;
  ii.Engaging in activities related to work and commuting to and from work within a reasonable timeframe and using a reasonable route;
  iii. Commuting to and from work via other reasonable routes within a reasonable timeframe.

Additionally, if the employer arranges or organises cultural and sports activities for employees, such activities will be deemed as work-related. However, activities like dining out, tourism, recreational outings, or entertainment organised by the employer under the guise of work, as well as engaging in activities that serve the personal interests of the employee or others, will not be considered as work-related reasons. These guidelines aim to provide clarity and prevent potential misuse of work-related resources for non-work purposes.

This opinion emphasises that the labours of construction enterprises should participate in work-related injury insurance through their employer must do so according to the relevant regulations; for those employed in construction projects where participation through the employer is not feasible, they must obtain work-related injury insurance at the project construction site in accordance with the project’s requirements. The general contractor or authorised subcontractor responsible for the project must promptly provide the social insurance agency with a comprehensive list of construction personnel each time they enter the construction site. This approach will help increase the effectiveness and operability of work-related injury insurance guarantees for employees engaged in engineering construction projects.

This opinion further highlights that workers are entitled to maintain their original wages and benefits throughout the medical period and shall return to work at the employer after the period concludes. In cases where the employer cannot provide suitable work for the injured worker before the end of the medical period and until the labor capacity evaluation is finalised, the worker should continue to receive their original wages and benefits as per their regular compensation package. If the employer offers suitable work to the injured employee, but the employee unjustifiably refuses to perform their duties, this situation will be handled in accordance with the applicable laws and regulations.

For further information, please refer to the official website of the Department of Human Resources and Social Security of Jiangsu Province to access relevant details.

3. The Maximum Amount of Taxable Housing Provident Fund Increased

The Huai’an Housing Provident Fund Management Center in Jiangsu Province revealed that the maximum amount of the taxable housing provident fund will be increased from ¥23,750 to ¥26,250 effective 1 January 2023. The housing provident fund deposit ratio of individual employees and employers is 5-12% respectively.

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