"Among other changes to employment law, after lasting speculation and debate, the decision to reform the statutory retirement age regime was officially promulgated this year. Employers in China will now need to prepare for the long-term impact of such reform."
2024 has seen several developments in employment law in China, reflecting the Chinese government's focus on the macroeconomy, as well as the employment sector, in the coming years. This article outlines the key highlights of employment law in 2024 and the outlook in 2025.
2024: HIGHLIGHTS
- On 13 September 2024, the legislature formally promulgated the
Decision of the Standing Committee of the National People's
Congress on Incrementally Raising the Statutory Retirement Age
(全国人民代表大会常务委员会关于实施渐进式延迟法定退休年龄的决定)
(the "Decision").
Under the Decision, over a period of fifteen years, the statutory retirement age for male employees shall be incrementally raised from 60 years old to 63 years old, and for female employees from 50 years old (for female employees with non-managerial positions) and 55 years old (for female employees in managerial and technology positions) to 55 years old and 58 years old, respectively. For example, for female employees in managerial and technology positions born between January and April 1970, their retirement age will be increased by only one month (i.e. adjusted to 55 years and 1 month old); while for those born in and after August 1981, it will be increased by three years (i.e. adjusted to 58 years old).
Simultaneously, the minimum contribution period for employees to receive basic pensions shall be incrementally raised from 15 years to 20 years, increasing by six months each year, beginning on 1 January 2030.
An employee who has met the minimum contribution period may voluntarily choose to retire early by up to three years, provided that the early retirement age does not fall below the current statutory retirement ages (i.e. 50 or 55 years old for female employees and 60 years old for male employees). Subject to a mutual agreement with the employer, an employee may also choose to delay their retirement by up to three years.
- On 22 March 2024, the legislature promulgated Provisions on
Facilitating and Regulating Cross-border Data Flow
(促进和规范数据跨境流动规定)
(the "Provisions"). The Provisions stipulate
that—in cases where it is necessary to transfer the personal
information of an employee across the border of China for the
purpose of cross-border human resources management, pursuant to the
employer's legally formulated labour policies or a collective
contract—the employer (as the data processor) is exempted
from various obligations under the Personal Information Protection
Law of the People's Republic of China
(中华人民共和国个人信息保护法)
("PIPL"). These obligations include: (i) conducting a
security assessment of outbound transfer of personal information;
(ii) concluding a standard contract of outbound transfer of
personal information; and (iii) passing the personal information
protection certification.
2025: OUTLOOK
According to the schedule of China's legislative
institutions, no significant changes to employment law are
scheduled in 2025. One notable new statute is the Interim Measures
for Illness and Disability Benefits under the Basic Endowment
Insurance for Enterprise Employees
(企业职工基本养老保险病残津贴暂行办法)
(the "Interim Measures") which will take effect on 1
January 2025.
Under the Interim Measures, enterprise employees having
participated in the basic pension insurance—who have been
assessed as completely disabled due to illness or non-work-related
injuries—may apply for the illness and disability allowance
on a monthly basis before reaching the statutory retirement age.
During the period of receiving illness and disability allowance,
the employee shall no longer be required to pay basic pension
insurance contributions.
China's retirement age reform will have a significant impact on
both employers and employees, for example, by increasing the cost
of human resources, as well as possibly decreasing employee
turnover. Employers should take steps to prepare, for example, by
updating documents to reflect each employee's applicable
statutory retirement age.
The recent releases on the cross-border transfer of personal information make it easier for multinational enterprises to globally manage their China-based employees' personal information. This is in line with the Chinese government's policy of reducing the burden on enterprises and further expanding openness.
This summary was prepared with the assistance of Gang Zhong, Mirror Zhou, and Heng Liang of Meng Bo Law Office, a PRC law firm based in Shanghai, with which Mayer Brown has a close working relationship.
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