The Chinese central government recently made two major moves related to its social insurance system. First, it started implementing the social security totalization agreements signed with Canada and Finland. Second, it issued a plan to potentially merge China’s maternity and medical insurance programmes.
Although the social security totalization treaties with Canada and Finland were signed in 2015 and 2014, respectively, China did not implement the China-Canada treaty until 1 January 2017 and the China-Finland treaty until 1 February 2017.
Under the treaties, employees who are hired by entities in Canada or Finland but seconded to work in China can be exempted from certain social insurance contributions in China. For Canadian secondees, the exemption covers pension contributions. For Finnish secondees, the exemption covers both pension contributions and unemployment insurance contributions. All of these exemptions are likewise available to Chinese secondees working in Canada and Finland. However, the exemptions are not automatic. Seconded employees unable to provide proof of enrolment in their home country’s social security scheme must fully contribute to the host country’s social insurance scheme.
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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
