According to the Municipal Civil Affairs Bureau, a series of noteworthy policy adjustments will take place in Shanghai from this month onwards. Within this article we will summarize the adjustments as follows:

I. Adjustment of the minimum wage from July 1st, 2023

Shanghai will adjust the minimum wage standard from July 1st, 2023. The monthly minimum wage rate will be adjusted from RMB 2,590 to RMB 2,690, an increase of RMB 100; the hourly minimum wage rate will be adjusted from RMB 23 to RMB 24.

1. The monthly minimum wage rate applies to workers in full-time employment with a labour contract signed in accordance with the law；

• Excluding social insurance contributions and housing fund paid by individual workers in accordance with the law；

• Excluding subsidy supplements.

2. The hourly minimum wage rate applies to workers employed on a part-time basis:

• The average daily working hours shall not exceed four hours and the total weekly working hours shall not exceed 24 hours.

• Excluding social insurance contributions paid by workers personally and by their units in accordance with the law.

II. Adjustment of the Base and Ratio of Housing Fund Contributions and the Upper and Lower Limits of Monthly Contributions in Shanghai from July 1st, 2023

With effect from July 1st, 2023, the basis of contribution to the Housing Provident Fund for employees in the city is adjusted from the average monthly salary in 2021 to the average monthly salary in 2022.

• The maximum amount of the Housing Provident Fund contribution base will not exceed RMB 36,549 and the minimum amount will not be less than RMB 2,590.

• Employees who join the workforce from January 1st, 2023, will use their second month's salary income or the actual average monthly salary issued as their housing fund contribution base.

• Employees newly transferred in from Jan 1st, 2023 onwards will use the salary issued after the transfer or the actual average monthly salary issued by them as their housing fund contribution base.

III. Adjustment of certain standards related to livelihood benefits in Shanghai from July 1st, 2023

1. The standard of payment for unemployment insurance benefits will be adjusted as follows:

• The rate of payment for the 1st-12th months will be RMB 2175/month.

• The payment rate for the 13th-24th months will be RMB 1,740/month.

• The payment rate for extended receipts is RMB 1,510/month.

2. Adjustments to the three-work injury insurance treatment rates for persons who become disabled or are killed as a result of work-related injuries occurring before December 31st 2022. The disability allowance is adjusted to:

• RMB 9276/month for Disability Level 1;

• RMB 8,643/month for Disability Level 2;

• RMB 8,124/month for Disability Level 3;

• RMB 7,592/month for Disability Level 4.

3. The cost-of-living care is adjusted according to the ability to take care of oneself as follows：

• RMB 6092/month (totally unable to take care of oneself);

• RMB 4874/month (mostly unable to take care of oneself);

• RMB 3655/month (partially unable to take care of oneself).

4. Pension

• The pension for dependent relatives of persons who are killed on duty will be increased by RMB 98 per person per month on top of the rate enjoyed in 2022.

At PHC Advisory, we can offer you full support on matters regarding doing business in China, or any other issues your business may face in China. If you would like to know more about policies relevant to your business in China, please contact us at info@phcadvisory.com.