There have been several developments in employment law in China in 2024, reflecting the Chinese government’s focus on the macroeconomy and the employment sector in the coming years.
This article outlines the key highlights of employment law in 2024 and the outlook for 2025.
2024 Highlights
On Sept. 13, the legislature formally promulgated the Decision of the Standing Committee of the National People’s Congress on Gradually Raising the Statutory Retirement Age (the “Decision”). Under the Decision, over a period of 15 years, the statutory retirement age for male employees shall be incrementally raised from 60 years old to 63 years old. For female employees, the statutory retirement age will go from 50 years old (for female employees with nonmanagerial 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 (that is, adjusted to 55 years and 1 month old). For those born in and after August 1981, it will be increased by three years (that is, 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 Jan. 1, 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 (that is, 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 March 22, the legislature promulgated Provisions on Facilitating and Regulating Cross-Border Data Flow (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 resource management, pursuant to the employer’s legally formulated labor 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. These obligations include: 1) conducting a security assessment of the outbound transfer of personal information, 2) concluding a standard contract of the outbound transfer of personal information, and 3) 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 (the “Interim Measures”), which will take effect on Jan. 1, 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, it will increase the cost of HR and possibly decrease employee turnover. Employers should take steps to prepare, such as 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.
Jennifer Chih is an attorney with Mayer Brown in Singapore. © 2024 Mayer Brown. All rights reserved. Reposted with permission of Lexology.
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