21 March, 2020
This alert summarizes recent national and local employment-related notices and policies that have been issued related to the ongoing effort to control the COVID-19 epidemic in China. Because of the changing nature of the situation, this alert is intended only as general information as of February 29, 2020 and should not be taken as legal advice. For further information, please refer to our regular Chinese-language updates, posts on the JunHe WeChat feed, and our English-language updates of January 31, 2020 and February 10, 2020.
I. Ministry of Human Resources and Social Security Address Outbreak Issues
The Ministry of Human Resources and Social Security on February 21, 2020 addressed employer obligations relating to the COVID-19 epidemic and the return of employees to work. The following summarizes some of the issues addressed:
-
What epidemic prevention and control measures should employers take when resuming work?
Employers should, in accordance with local government requirements, improve workplace ventilation, provide protective equipment (e.g., masks) and hand washing and other facilities, clean and disinfect workplaces, dormitories, and canteens, and avoid or reduce staff meals and group activities.
-
May an employer terminate an employee who does not want to return to work?
For employees who do not wish to return to work, the enterprise trade union should explain the requirements of the epidemic prevention and control policy and the importance of the resumption of work, and take the initiative to persuade employees to return to work in a timely manner. If the employees are not persuaded to return or otherwise refuse to work without justifiable reasons, the employer may handle the situation in accordance with law.
This approach reiterates a position taken in a February 7, 2020 notice jointly issued by the Ministry of Human Resources and Social Security indicating that employees who refuse to return to work could be terminated in accordance with employer rules.
-
May an employer terminate an employee if the employee is unable to provide normal work because of quarantine or government emergency measures?
No, an employer may not terminate an employee or return a dispatched worker to an agency if the employee or worker is unable to work due to a quarantine or such measures.
If an employment contract would expire during the period an employee is under quarantine or not able to work because of emergency measures, the contract should automatically extend to the expiration of the medical treatment period, medical observation period, or the period of isolation, or the end of the emergency measures.
-
May employers extend working hours during the period of outbreak prevention and control?
Employers that need employees to do overtime work for government epidemic prevention and control work may extend working hours after consulting with the trade union and employees. These employees are not subject to restrictions on extended working hours. (As background information, under normal circumstances, overtime hours may not exceed 36 hours per month.)
-
How are overtime exemption approvals treated?
An employer approval to implement the flexible working hours system or the comprehensive working hours system that expires during the period of epidemic prevention and control would automatically be extended to the end of the epidemic prevention and control period. The employer should submit an application to extend the approval within 10 working days after the end of the epidemic prevention and control period.
-
May employers refuse to hire people on the grounds that they are from areas with severe outbreaks?
No, employers may not publish information that indicates that persons from areas with serious outbreaks will not be hired. Employers may also not refuse to hire such persons on grounds that they come from areas where the epidemic is severe.
-
How should "shared employment" between companies be treated?
Shared employment, which is when companies send idle employees to companies that have labor shortages, to a certain extent improves the allocation of human resources. Shared employment does not change the labor relationship between the original employer and the employee. The original employer remains responsible for employee remuneration and social insurance contributions. The original employer should encourage the company where the employees are working to make reasonable arrangements on working hours and work duties. The relationship between the two companies in regards to the use of employees may be clarified by contract. The original employer should not profit financially from the arrangement.
-
How should employees be paid when not able to work because of legally mandated quarantines?
Employers must pay normal salary to employees who are unable to work due to quarantines. If employees still cannot work after the end of quarantines, employers may pay employee statutory sick pay. (The amount of sick pay varies among cities. In Beijing, sick pay can be as low as 80% of the local minimum wage. In Shanghai, sick pay ranges from 60%-100% of an employee’s normal salary depending on the employee’s service years with the employer and the length of the sick leave.)
-
May an employer delay the payment of salary if the outbreak has resulted in production and operation difficulties and the inability to pay salaries?
Employers that have production and operation difficulties resulting from the epidemic are encouraged to engage in consultations with employees in order stabilize employment by adjusting pay, adopting work shifts, and shortening working hours. If an employer does not have the ability to pay salaries, an employer delay payment after consultations with the trade union or staff representatives.
-
Is it an occupational illness if an employee is infected with COVID-19 while at work?
A January 23, 2020 notice issued by the Ministry of Human Resources and Social Security clarified that medical and related staff members who contract COVID-19 or die of COVID-19 as a result of their duties would be recognized as having an occupational illnesses and be entitled to occupational illness insurance benefits. For other types of employees, being infected with COVID-19 at work is not regarded as an occupational illness. (Guangdong, Sichuan, Yunnan, Jilin, and Henan provinces have made an exception to this general rule if employees are required by their employers to take business trips to areas with a high rate of infection.)
II. Social Insurance Issues
The Standing Committee of the State Council on February 18, 2020 adopted national policies to reduce the financial impact of the epidemic on employers as well as to help stabilize employment. Among the policies are the reduction of employer social insurance contributions and the delay of housing fund contributions. The policies have gradually been implemented by national and local notices and policies.
-
On February 20, 2020, the Ministry of Human Resources and Social Security, together with the Ministry of Finance and the General Administration of Taxation announced the following:
– From February 2020, provinces may exempt small and medium-sized enterprises for up to five months from paying the employer portion of contributions for pension, unemployment, and occupational injury insurance.
– Provinces may reduce by 50% the employer contributions for pension, unemployment, and occupational injury insurance for large enterprises for up to three months.
– Hubei province may exempt all employers from paying the employer contributions for pension, unemployment, and occupational injury insurance for up to five months.
– All employers that suffer serious difficulties in production and operation due to the outbreak may apply for deferred payment of contributions for all five types of social insurance for up to six months. Approved employers would not be liable for late payment fees.
To date, Guangdong, Henan, Guizhou, and Hunan provinces have issued implementing regulations for these social insurance policies.
-
On February 20, 2020, the Ministry of Housing and Urban Rural Development announced that employers may apply with local authorities to delay payment of housing fund contributions until June 30, 2020. No interest or penalties would be imposed on delayed contributions.
-
On February 24, 2020, the National Healthcare Security Administration, the Ministry of Finance, and the State Administration of Taxation issued guidance stating that provinces having sufficient financial resources to cover six months of medical insurance expenses are encouraged to reduce employer medical insurance contributions by up to 50% for five months. Other provinces could reduce the rate of employer contributions depending on the financial resources of the provinces. Provinces wanting to reduce employer contributions must report to national authorities by March 5, 2020. To date, only Hebei province has filed such a report.
-
On February 25, 2020, Guangzhou municipal authorities issued a notice detailing how the city would implement a State Council policy to refund unemployment contributions. Under the notice, employers may receive a refund of 50% of the insurance contributions made in 2019 if the following conditions are satisfied:
– unemployment insurance contributions have been paid in full for one year.
– employers with more than 30 employees may not have laid off more than 5.5% of staff during the past calendar year.
– employers with 30 or fewer employees may not have laid off more than 20% of staff during the past calendar year.
Many cities have issued similar rules for refunds of unemployment insurance contributions, and are expected to issue similar rules that would apply for 2020 contributions.
III. Employer Return to Work Obligations
On February 24, 2020, Beijing authorities issued a notice clarifying obligations of employers in commercial buildings regarding the health of employees. Among these obligations, employers are expected to:
-
limit staff presence to a maximum of 50% through such means as flexible hours, work from home, rotating duties, and commuting during non-peak hours.
-
require employees who have returned to Beijing from other locations to strictly comply with quarantine requirements.
-
check the temperatures of employees on a daily basis.
-
require all employees to wear masks.
-
report to authorities on a timely basis any employees having symptoms of illness, encourage these employee to seek medical treatment, and require the employees to stay at home for medical observation.
-
encourage employees to avoid the use of elevators, and ensure that the number of passengers on elevators does not exceed 50% of the maximum capacity of the elevator car.
-
arrange for each employee to have at least 2.5 square meters of work space and be separated from other employees by at least one meter.
Although no penalties are specified in the notice, Beijing authorities be expected to conduct workplace inspections. Any employers found not to be in compliance may be ordered to correct their practices.
In addition, according to a Beijing notice issued on February 28, 2020, employee dormitories may not have more than six persons per room with each person having at least four square meters of space.
IV. Quarantine Requirements
New local regulations are being issued regarding quarantine requirements, and the obligation of individuals to report where they have traveled and whether they may have been in contact with infected persons. Employees who have been diagnosed with COVID-19 would be required to receive medical treatment.
The following summarizes the rules for Beijing, Shanghai, Guangzhou, and Shenzhen that could require an employee who is not infected to be quarantined. Generally speaking, an employee could complete a quarantine at home. In many situations, the enforcement of quarantine requirements may be left to the discretion of neighborhood or housing authorities where the individual lives.
-
Beijing
All individuals, including foreign nationals, who have been in other areas of mainland China before arriving in the city are generally required to undergo a 14-day quarantine. Before departing for Beijing, individuals must first report their location and condition to their Beijing neighborhood authorities. These authorities then may have the discretion whether a quarantine can be served at home or in designated facilities (e.g., hotels).
The following types of individuals arriving in Beijing from other areas of mainland China (than from Hubei province) are exempted from the quarantine requirements:
– individuals who travel to Beijing for short business trips.
– individuals who could resume work in a closed environment and under close medical observation.
– individuals who live in Langfang, Hebei province or other cities near Beijing and travel to Beijing to work on a daily basis.
– individuals who are sick or pregnant may visit a doctor during quarantine.
At a press conference on February 27, 2020, Beijing officials stressed that persons should not return to Beijing from Hubei province. Earlier, Xicheng district authorities had announced that individuals who arrive from Hubei are subject to 14-day quarantines in designated facilities.
On February 26, 2020, Beijing authorities imposed restrictions on persons returning to the city from abroad. Individuals who have been in key areas of the epidemic (which is not defined) are required to undergo a 14-day quarantine.
-
Shanghai
Individuals who have been in key areas of the epidemic (which is undefined but includes at least Hubei province), persons who have been in close contact with individuals who have been in such areas, and persons who have been in close contact with individuals who have been infected or suspected to be infected are required to be quarantined for 14 days. The relevant period for presence in key areas is understood to be 14 days prior to arrival in Shanghai.
While the general rule in Shanghai is that persons who have visited other areas may go to work without quarantine, the Shanghai districts of Hongkou, Jing’an, Jiading, Fengxian, Putuo, Chongming and Qingpu have issued notices stating that individuals returning from outside the city, including persons coming from abroad, should in principle complete 14-day quarantines. In addition, employees arriving from outside the city who work in commercial buildings in Pudong New Area district are required to complete 14-day quarantines before returning to work. This Pudong requirement applies without consideration where the employees live in Shanghai.
-
Guangzhou
Individuals who have been to key areas of the epidemic (not defined but should include Hubei and Wenzhou city) within 14 days prior to arriving in Guangzhou are subject to 14-day quarantine. Employers are obligated to pay full salary during such a quarantine. Individuals who have visited other areas are not subject to quarantine and therefore may attend work.
-
Shenzhen
Individuals arriving in Shenzhen from the place where the epidemic occurred (not defined but should include Hubei and Wenzhou city) are subject to 14-day quarantines. Individuals who have visited other areas are recommended to complete quarantines at home.
V. Foreign national employees
Central government authorities responsible for the approval of work permits, visas, and resident permits have issued a series of policies that apply during the period of epidemic prevention and control. No expiration dates have been announced for the policies.
-
Work permits
The Administration of Foreign Experts Affairs announced on February 7, 2020 on relaxation of the requirement that a renewal application must be submitted at least 30 days prior to the expiration date of a work permit. Instead, employers now have until work permit expiration dates to submit online applications to renew permits.
Shanghai authorities announced on February 1, 2020 that online application procedures generally available only for more qualified Category A employees are extended to applications for Category B and Category C employees. Employers of Category B and Category C employees must submit letters assuring that application documents submitted online are authentic. The online procedure, which eliminates the requirement for hard copy on-site filing, applies to applications for notification letters for Z visas, work permit renewals, and work permit cancelations.
-
Visas/Resident Permits
On February 27, 2020 the National Immigration Administration announced the following polices:
– the terms of visa and residence permits automatically extend for two months for foreign nationals who are engaged in innovative entrepreneurship and scientific research.
– foreign nationals who have used the maximum number of entries permitted by their visas may get new visas in China. Under usual practice, these foreign nationals would be required to get new visas abroad.
– foreign nationals who have resident permits that expire when they are outside of China may apply for landing visas at Chinese ports in order to enter the country and later file to extend their resident permits.
– foreign nationals who have investment, entrepreneurship, business, or other urgent matters may first enter China on landing visas and then convert the visas into other types of visas or residence permits in China with supporting documentation.
– visa, residence permit, and permanent residence applications may be submitted by email or postal mail.
– expedited examination and approval procedures for Chinese and foreign employees who need to enter and leave the country for the resumption of work.
The National Immigration Administration announced on January 31, 2020 that foreign nationals who are unable to exit China before the expiration of their visas or resident permits, or are unable to extend visas or residence permits, may be given lighter penalties or exempted altogether from sanctions.
Earlier, Shanghai authorities on December 29, 2019 had announced that foreign nationals holding Z work visas that have expired due to delays cause by the epidemic may enter China with other types of visas and convert those visas in China into resident permits.
For further information, please contact:
Dongpeng Wang, Partner, Jun He
wangdp@junhe.com
