On 3 August 2018, the Chinese State Council published a circular abolishing 11 administrative licenses including the employment permit requirements for residents of Taiwan, Hong Kong and Macau (THKM). To facilitate employment processes, a work permit will no longer be needed for THKM residents to work in mainland China.
Background
Residents of THKM were previously required to obtain a work permit from the municipal human resources department after submitting 10 items of paperwork, which included the employer’s business license and the employee’s health certificate, among other documents. In addition, Chinese employers had to prove that they didn’t find any qualified candidate in mainland China to fill the position. Although, the work permit process for THKM residents was less arduous than for other foreigners, and it typically took only one to three weeks to complete, THKM residents still had to renew it every two years and anytime they switched jobs or cities in mainland China.
Key details
The Ministry of Human Resources and Social Security (HRSS) will issue further measures to guide the supervision of employment, social security, unemployment registration as well as labor rights protection and benefits of THKM residents. It remains unclear at this stage whether THKM residents will be treated as local employees and subject to mainland China employment laws regarding social insurance and retirement age.
THKM residents will not enjoy the same healthcare and pension benefits as Chinese citizens despite the abolition of employment permits. For instance, THKM residents will have to pay in full for healthcare services in public hospitals and get reimbursed by social insurance later if provided by the employer.
Employer implications
Local HRSS of most cities, including Beijing, Chengdu, Guangzhou, Qingdao and Shenzhen stopped accepting work permit applications or made it optional for THKM residents. However, employers should continue applying for work permits for their THKM employees in Shanghai and Tianjin until their local HRSS announces the implementation timeline.
Next Steps
Employers should monitor the implementation of the new policy for each of their cities. HRSS implementation guidelines are expected to be released by the end of the month for all cities in mainland China.
