Government to provide employment subsidy for certain enterprises

In an effort to help cushion the impact of changing business conditions and restructurings on employment, on 16 November 2014 the Ministry of Human Resources and Social Security and other government departments jointly issued the Circular on Issues Concerning Supporting Enterprise Employment Stabilisation with Unemployment Insurance, which requires the unemployment social insurance fund to grant eligible enterprises subsidies for stabilising employment.

In general, this employment stabilisation subsidy may apply to companies that are: (a) undergoing a merger or restructuring resulting in a significant change in management control; (b) reducing overcapacity in industries with rampant overcapacity such as iron and steel, cement, aluminium, flat glass or ship building; (c) closing down outdated production facilities in such industries as electricity, coal, iron and steel, cement, non-ferrous metal, coke, paper making, leather making, printing or dyeing; and (d) other enterprises approved by the State Council.

Business Law Digest is compiled with the assistance of Baker & McKenzie. Readers should not act on this information without seeking professional legal advice. You can contact Baker & McKenzie by e-mailing Danian Zhang (Shanghai) at: danian.zhang@bakermckenzie.com