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Workforce Flexibility and Government Incentives in times of Covid-19 - China

Short-Term Work State Aid

Covid-19 Questionnaire

Are there any regulations in place providing an employer with possibility for flexible workforce planning such as part-time work/temporary leave which are triggered in a situation similar to a pandemic outbreak as Covid-19?

Yes

If YES on question 1, please describe which type of regulation. Please confirm if and to what extent such leave can be supported by state aid and/or other extra-ordinary governmental support.

  • Employers are encouraged to arrange employee to work at home or remotely;
  • Employers may consult with employees to give priority to use statutory paid annual leave and welfare leave;
  • Employers may consult with employees to deduct the normal working hours;
  • Employers are encourage to arrange employee to adopt flexible working hours but ensure the effective working time to avoid the traffic peak period, for example, come to the office earlier and off duty earlies or vice versa; in addition, the employer can apply for special working system with the local government, which including comprehensive working hour system and non-fixed working hours system according to applicable positions.

if YES on question 1, please describe which contacts that may need to be initiated with trade unions and/or works councils. Must a special process be followed?

    Consultation with trade union will be required for the employer’s importance decision related to
  • the company’s operation, such as the employer decides to cease operation due to business struggling rather than government restriction; or
  • the employees’ vital interests, such as the employer would like to adjust the employee’s salary or working positions, working hour due to its difficulties in production and operation causing by the outbreak, such adjustment could only be proceeded upon mutual consultation with employees or via collective negotiation with the works councils and/or trade unions.

Are there any governmental programs if a company needs to close totally or partially for a certain time period?

For the companies with difficulties and are struggling in business due to the outbreak, the national rules set up preferential policies to support the employers during the outbreak, which are mainly as below:

  • To apply for deferment and exemption on social insurance contribution of the employers’ part, specifically, no more than 5 months’ fully exemption for small and medium size enterprises, and 50% reduction for large scale enterprise and the reduction should not be more than 3 months. The exemption covers pension, unemployment and work-related injury issuance. The application for deferment of social insurance can be last for 6 months.
  • To apply for subsidy for online skills training arranged by the employer during such specific period.
  • The employer that does not downsize employees and keep stable positions is entitled to apply for return of unemployment insurance.
  • The labor administrative department shall also provide sufficient and necessary support and guidance on the employers’ recruitment and employment management.

If state aid and/or other extra-ordinary governmental support is available, please describe the necessary prerequisites to qualify for such state aid.

Please refer to comments in question 2.

If state aid and/or other extra-ordinary governmental support is available, please describe the application procedure for such state aid (e.g. how and when is the application filed with the government etcetera; what shall such application include).

Please refer to comments in question 2, applications should be submitted to the social insurance management center and the applicable local human resources and social security bureau, and each locality has the specific procedures and government criteria.

Please note that the COVID-19 scenario is constantly changing and that this information is current as of 27 March 2020. This publication should not be regarded as offering a complete explanation of the legal matters referred to and is subject to changes in the law and other applicable rules.