Proposals floated to protect employees from air pollution
Government advisors and commentators in January voiced support for measures that would
protect employees from air pollution. Members of the Shaanxi Provincial Committee of the
Chinese People's Political Consultative Conference reportedly reintroduced a proposal in January
at the opening session in Xi’an that outdoor workers receive “hazard pay” during periods of high
pollution and that "haze" be listed among occupational disease risk factors. According to the
proposal, local governments—not employers—would pay allowances to workers, including
construction workers. The provincial human resources and social security department and trade
union federation have reportedly been studying the feasibility of such a proposal since last year.
Members of the Henan Provincial Chinese People's Political Consultative Conference also
reportedly submitted a proposal for smog subsidies for outdoor workers. A January 24
commentary in the influential Party newspaper Guangming Daily advocated that companies who
produce air pollution be charged fees that the government could use to compensate outdoor
Many cities and provinces have issued rules defining pollution alert levels. For the highest level of
orange and red alerts, construction sites and certain employers may be required to suspend or
reduce production. In the past two years, Beijing has issued three red alerts and three orange alerts
covering a total of 30 days.
A political advisor in Ningbo, Zhejiang reportedly proposed in January that employees be allowed
to work flexible hours during days when there is heavy pollution. Such a proposal would add to
protections Ningbo already offers employees. Ningbo local rules require that employers pay full
salary if an employee is required to suspend or reduce work due to a red alert.
Ningbo also prohibits employers from disciplining or terminating employees who are late or absent
from work due to a red alert. Employers can be fined up to RMB 20,000 per violation. Other cities,
including Shanghai and Shaoxing, have issued similar rules in the past two years.
Also in January, provincial and city weather bureaus reportedly were instructed to stop issuing
smog alerts in order to avoid contradictory information issued by environmental authorities.
Personal information protection obligations likely to increase
Employers are expected to be increasingly obligated to protect employee personal information
pursuant to the Cybersecurity Law, which was issued on November 7, 2016. While the
Cybersecurity Law does not specially address whether employers with internal IT networks will be
considered “network operators”, and thus be subject to the law’s obligations regarding personal
information protection, additional regulations and national standards are expected to clarify
employer obligations before the law’s scheduled effective date of June 1, 2017. At that time,
employers could be obligated to implement classified cybersecurity protections according to
specified standards for the collection, storage, processing and transfer of personal information of
An example of upcoming guidance is the draft Personal Information Security Specification, which
addresses the collection, storage, transfer and disclosure of personal information. The
Specification defines “sensitive personal information” as information that once leaked, disclosed
or abused, may potentially harm personal property, security, personal reputation, physical and
mental health, or cause discriminatory treatment. ID numbers, bank account information, health
records, and biometric information are listed as examples of sensitive information. Although the
Specification is unlikely to have binding effect as a law, it will likely establish sound practice
principles for employers to follow, and may serve as a basis for regulatory authorities to enforce
the Cybersecurity Law and for courts to determine privacy-related cases when no applicable law is
Work permit requirements eased for recent graduates
Foreign nationals who have graduated with at least a master’s degree from a Chinese university or
an “overseas famous university” may be exempted from the requirement to have two years of
relevant overseas work experience when applying for PRC work authorization pursuant to a circular
issued on January 6, 2017. The circular is part of a series of recent measures aimed at revamping
the country’s work authorization system and encouraging highly-skilled and educated foreign
nationals to work in China. The number of recent foreign nationals eligible for the special work
authorization will be subject to annual quotas per province as determined by the Ministry of
Human Resources and Social Security.
The requirements for the special work authorization include:
- graduation within one year of the work authorization application;
- excellent academic record;
- an advanced degree and major that is relevant to the proposed job position;
- salary of at least the local average salary (e.g., currently RMB 5,939 in Shanghai); and
- no criminal record.
While the circular does not define “overseas famous universities”, rules issued last year refer to a
list of 100 universities published by Shanghai’s Jiaotong University.
Under the special authorization, graduates of overseas universities will be required to enter China
with “Z” (i.e., work) visas. Graduates of Chinese universities may convert PRC residence permits
for study into residence permits for work without being required to leave China.
China and Canada social insurance agreement takes effect
A social insurance agreement between China and Canada entered into force on December 27, 2016
exempting Chinese and Canadian nationals seconded to work in the other country and “selfemployed
persons” working in the other country from participation in statutory pension programs
if contributions are made in their home countries. Employees remain obligated to participate in
other types of social insurance programs. A “self-employed person” (自雇人员) is understood to
be a person who owns companies and works in both countries.
A separate bilateral social insurance agreement between China and Finland takes effect on
February 1, 2017. Under this agreement, Finnish nationals seconded to China and self-employed
persons are exempt from contributing to PRC pension and unemployment insurance programs if
contributions are made in Finland.
The PRC Social Insurance Law requires that foreign nationals working in China participate in the
statutory social insurance programs unless there is an applicable treaty exempting participation.
Housing Fund Program may open to foreign employees in Shenzhen
Draft regulations issued on January 4, 2017 would allow foreign nationals and residents of Hong
Kong, Macau and Taiwan who are legally working in Shenzhen to voluntarily participate in the
Housing Provident Fund. Eligibility for foreign nationals is currently limited to those holding
permanent residence status.
Under the draft proposal, employers and employees would make contributions at the same rates
as PRC nationals with employees entitled to the same use of the funds, such as paying a mortgage,
rent, or for renovations of an apartment. The employer and employee contributions would not be
taxable income of the employees. Foreign nationals and residents of Hong Kong, Macau and
Taiwan would be entitled to cash out their fund accounts if they leave mainland China or move to
a different region where participation in a local housing provident fund program is not allowed.
If the draft rules are approved, Shenzhen would join Shanghai as one of the few cities that permit
foreign nationals, as well as residents of Hong Kong, Macau and Taiwan, to voluntarily contribute
to local housing funds.
Transgender employee wins termination case in district court
A transgender employee won an unlawful termination claim on December 18, 2016, in a district
court case that generated widespread domestic and international attention. This case is believed
to be the first unfair termination case in China filed by a transgender employee.
Referred to publically only as Mr. C, although born as a woman, the employee identifies as a man.
Mr. C was dismissed after seven days of working as a sales consultant for the Ciming Health
Examination Center in Guiyang, Guizhou province. In May 2016, an arbitration tribunal ruled that
Mr. C was legally terminated during the probation period on the basis of poor performance.
The district court reversed the arbitration decision and found that the employer had not provided
sufficient evidence to support poor performance, and consequently awarded Mr. C RMB 483 in
unpaid salary as well as statutory damages in the amount of RMB 1,500. The district court
rejected Mr. C’s argument that Mr. C was actually fired on the basis of unlawful discrimination.
The district court’s reasoning was that discriminatory statements and comments made by one of
Mr. C’s colleagues could not be attributed to conduct on behalf of the employer.
Wang Yongmei, one of Mr. C’s lawyers, stated that the district court decision was acceptable
because the labor arbitration award was overruled and the termination was ruled unlawful; the
court ordered damages, and the case attracted considerable attention to the issue of transgender
employees in the workplace. Ms. Wang noted that the court’s written decision quoting a nondiscrimination
provision of the Employment Promotion Law indicated an appreciation of Mr. C’s