On June 1^st, four departments including the Ministry of Human Resources and Social Security issued the "Notice on Expanding the Implementation Scope of the Deferred Payment of Social Insurance Premium Policies". Other than the most heavily hit industries by the lockdown restrictions such as retail, tourism, civil aviation, and road, water, and railway transportation, companies operating in the following 17 industries are now also eligible for new policies:

1. Agricultural and sideline food processing industry, 2. Textile industry, 3. Apparel industry, 4. Paper and paper products industry, 5. Printing and recording media reproduction industry, 6. Pharmaceutical manufacturing, 7. Chemical fiber manufacturing , 8. Rubber and plastic products industry, 9. General equipment manufacturing, 10. Automobile manufacturing, 11. Railway, ship, aerospace and other transportation equipment manufacturing, 12. Instrument manufacturing, 13. Social work, 14. Broadcasting Television, film and sound recording industry, 15. Culture and art industry, 16. Sports, 17. Entertainment industry.

Enterprises of the above-mentioned industries can apply for delaying the payment of the company’s payment part of the three social insurance premiums. Among them, the implementation period of deferred payment of endowment insurance premiums shall be until the end of 2022, and the deferred payment period of work-related injury and unemployment insurance premiums shall not exceed one year.

In addition, for all small, medium and micro enterprises as well as individual industrial and commercial households participating in the insurance scheme in the form of companies, which are seriously affected by the pandemic, the payment of the three social insurance premiums will be postponed in stages until the end of 2022.

Enterprises which recruit college graduates in the graduation year, sign labor contracts and participate in unemployment insurance can be granted a one-time job expansion subsidy at the standard of no more than RMB 1,500 per person, with the implementation period until the end of 2022.

The notice requires all provinces (autonomous regions and municipalities) to formulate specific implementation measures on the basis of ensuring that various social security benefits are paid on time and in full.

For example, the specific implementation measures formulated by the Shanghai Government provide that:

1.     On deferring the payment of the enterprises in difficulties in the expanded industries, a company can apply for deferred payment of social insurance premiums of the company portion, with the period of deferred payment of basic pension insurance premiums and basic medical insurance premiums from June to December 2022.

The period of deferred payment of work-related injury insurance premiums and unemployment insurance premiums is from June 2022 to March 2023.

During this period, enterprises can apply for the deferment of payment for different periods according to their own circumstances.

2.     All small, medium and micro enterprises and individual industrial and commercial households participating in the insurance in the form of units that have temporary difficulties in production and operation affected by the pandemic can apply for a delay in paying social insurance premiums.

The period of deferred payment of premiums, work-related injury insurance premiums, and unemployment insurance premiums is from June to December 2022, and no late payment fees will be charged during the period.

3.     Application conditions shall be met, whereby, except for the enterprises in the 5 industries which experienced extreme hardship, employers applying for deferred payments should meet the requirements of being greatly affected by the pandemic, experiencing temporary difficulties in production and operation, unable to produce and operate normally for one month or more since April 2022, and from January to May 2022 with accumulated losses.

4.     The deferred payment of social insurance premiums shall adhere to the voluntary principle.

During the deferment period, the employer may, according to its own circumstances, apply to the social insurance agency for deferring the payment of social insurance premiums for a certain period of time; if the application is not filed in time, the month before the application will not be retroactive.

At PHC Advisory our team is constantly monitoring the most recent developments and incentives accessible to businesses in China. Feel free to reach us at info@phcadvisory.com to find out more about preferential policies in China that your company could benefit from.