Our China employment lawyers are often asked by client-employers whether they need to pay social insurance for their expat employees. The short answer is “it depends.” The slightly longer answer is that we need to check with the relevant authorities for the specific locale because there is no one right answer.
The Provisions on the Employment of Foreigners in China (《外国人在中国就业管理规定》), mandate expat participation in social insurance programs must comply with applicable Chinese law. But before the Interim Measures for the Participation in Social Insurance of Foreigners Employed in China (《在中国境内就业的外国人参加社会保险暂行办法》) were passed in 2011, there were no national guidelines. As with many things China, the lack of central government guidance meant each locale dealt with this issue with its own rules, and that is still the case.
Shanghai, for example, does not require employers pay social insurance for expats. Since 2009, the governing guideline for Shanghai has been the Shanghai Municipal Human Resources and Social Security Bureau’s Circular on Several Issues Regarding Participation in Social Insurance for Urban Workers by Foreign Workers in Shanghai, Workers with Foreign Permanent (Long-Term) Residency and Taiwan, Hong Kong, and Macao Residents (《关于在沪工作的外籍人员、获得境外永久（长期）居留权人员和台湾香港澳门居民参加城镇职工社会保险若干问题的通知》)（沪人社养发38号）. According to this Circular, an employer does not have to make social insurance payments for expats and even where the employer and the expat have agreed on the employer contributing such benefits, the employer’s obligation is limited to pension, medical and work-related injury insurance, with maternity and unemployment insurance not covered.
As mentioned above, in 2011, China’s Ministry of Human Resources and Social Security passed Interim Measures for the Participation in Social Insurance of Foreigners Employed in China. Under these Measures, an employer must pay for all five types of social insurance (pension, medical, work-related injury, maternity and unemployment insurance) for an expat. Shanghai, however, has not adopted this national standard and it is not mandatory for Shanghai employers to contribute social insurance for their expat employees. Shanghai’s position is that until China’s Central Government issues detailed national measures, it will not change its current rules regarding expat social insurance.
On the other hand, Beijing and Shenzhen generally requires employers pay all five types of social insurance (pension, medical, work-related injury, maternity and unemployment insurance) for expats. Shenzhen further complicates things by treating expats as employees without a Shenzhen hukou for purposes of social insurance. The exact types of social insurance which must be paid for expats depends on the class of medical insurance the employer provides. An expat with “class one” or “class two” medical insurance must receive all five types of social insurance, while an expat with class three medical insurance gets four types of social insurance (pension, medical, work-related injury and unemployment insurance).