Q&A from our HR experts:
Over the past couple of weeks, many clients have asked various questions around employment and the various ramifications that the spread of the Coronavirus might have on employment mechanisms.
Companies expressed an interest in learning about the most practical employment models for the current climate; the sorts of tasks they can and can’t instruct employees to execute; what the implications for salaries and compensation are; as well as other questions relating to employment termination processes, work permits, and visa renewals.
In replying to all of these queries personally we gathered various insights and lessons on the current situation in China. Now that our China team is back at work, we’ve asked our HR Directors to outline these key points and we encourage anyone who runs a business and employs workers in China to take a look:
Here is an HR update, and answers to some frequent questions we have been asked by our clients.
Is it legal to release employees who cannot perform their duties due to the virus?
If an employee is infected by the virus, the company cannot terminate their employment. If the employee is not able to return to work (e.g. the city is under lockdown or the public transportation is stopped), the company can negotiate with the employee regarding using the annual leave days for the days of absence (the count starts from the first day the local government determines as the date of work resumption, i.e. the 10th of Feb). But in any case, salaries must still be paid.
Is it legal to pay partial salary to employees if they cannot come to the office and cannot be as productive?
If an employee cannot return to work due to the precautionary measures taken to stop the spread of the virus, the company still needs to pay full salary for the first month, and a certain % for the second month which varies regionally, to cover living expenses. For example, in Beijing the payment for a second month is 70% of the local minimum wage.
Can employees be “forced” to conduct meetings in light of the current situation with China (e.g. attend meetings in the office, fly to meet customers, or travel to visit suppliers)?
First and foremost, at present the recommendation is to avoid gatherings and face-to-face meetings of any kind. In the event of an employer asking their staff to go on a business trip, especially to an area with high infection rates, the individual employee has the right to appeal to the local government and file a complaint claiming that the company isn’t taking the necessary safety measures. Therefore, the best solution is to discuss with the employees and to try to find an alternative that is acceptable to both parties, i.e. online meetings.
Do you employ in Shanghai? Here are some key points to consider:
- For the last 2 years, Shanghai has been offering a 50% refund of the unemployment insurance premium which has been paid during the past year both by the employer and the employees. If, in light of the situation, there are employees who are prevented from doing their work and are allegedly “unemployed”, you can take advantage of this benefit.
- Employers expenses on social insurance premiums, such as medical insurance increase every April, and the housing fund increases every July. This year the adjustment of social benefits rates is expected to be postponed by 3 months. Employers get to enjoy this delay, so the increase in their expenses will be frozen for 3 months, i.e. the company will pay social insurance under the new rate for only 9 months, instead of 12 months.
- From February to December 2020, the contribution rate of the basic medical insurance for employees (including maternity insurance) will be reduced by 0.5% points, from the current 10.5% to 10%. The rate of individual contribution will not be adjusted.
- Employers who are unable to pay fees in time due to the virus, are allowed to do so with zero interest within 3 months after the epidemic is faded, and after reporting the competent authority. However, this benefit does not include an exemption from social insurance payments. A 3 month overdue will incur an additional charge, which will be provided together with the 4th month payments.
- Enterprises in Shanghai that have sent their staff to online vocational training programs during the epidemic outbreak, as well as online commerce enterprise owners, will enjoy 95% subsidy of the actual cost of training. This reimbursement will be paid by special education funds in each district, aimed at reducing the training cost paid by the company.
Today, more than ever, with a higher degree of uncertainty around employment protocols, proper handling of manpower affairs is necessary to ensure continued stability and efficient business operation. Instill your workers with a sense of security, show them you are there for them, and of course, we are at your disposal with any matter that arises and if you need assistance in China.
Let’s hope that the crisis will soon be under control and that the Chinese market will be operating as usual once again.
PTL Group team