Immigration

China | Foreign Work Permit and China Social Security Card two-in-one

Summary

Recently, the Ministry of Human Resources and Social Security issued the latest notice (Renshebufa [2024] No. 75) announcing that from 1 December 2024, the integration of foreign work permits with social security card will be implemented. This new arrangement will involve including the information from foreign work permit on the social security card, thereby enhancing administrative efficiency and offering more convenience and benefits. Also, it will no doubt serve as an integrated platform for local departments to monitor and assess the compliance status of foreign nationals participating in China’s social security scheme.

The detail

How does it work?

Under the new system, foreign nationals will no longer be issued a physical Work Permit Card. Instead, their work permit information will be digitized and displaced on the electronic Social Security system, which can be accessed through a mobile application.

Different situations require different approaches to effectively navigate through the new change:

1. Foreign nationals holding valid China Work Permit Cards.
   1. Existing Work Permit Cards remain valid for use;
   2. The upgrade application to transition from the current physical card to the new digital card in the new system can be submitted during the next application process, such as work permit renewal or information update;
   3. Alternatively, applicants can choose to voluntarily initiate the upgrade process.
2. Foreign nationals in the midst of a new application process and have not yet received their Work Permit.
   1. Delays in processing may occur during the system update.
   2. Those with the Work Permit Notification Letter (“WPNL”) must upgrade it to the new system before submitting the Work Permit application.
   3. Applicants who have already submitted the WPNL, or Work Permit application, but have not yet been approved, need to resubmit the application under the new system.
   4. The resubmission and upgrade process may cause a delay of around 1 to 2 weeks.

In the future, foreign nationals will have access to their Work Permit information through the new Social Security system. Individuals can download the “eSSCard” app on their mobile phones.

What are the related implications?

In accordance with the current China Social Security Law (effective from July 1, 2011) and the Interim Measures for Foreign Nationals Participating in China Social Security Scheme (effective from 15 October 2011), all local Chinese companies and their foreign employees must register and contribute to social security system, covering pension, medical, work injury, unemployment, and maternity insurance. Failure to make full and timely contributions may result in late payment surcharges or penalties. This requirement applies to all foreign employees, whether they are locally hired foreign or under a “secondment” arrangement.

However, enforcement and local practice differ from city to city. Taking Shanghai as an example, under the previous local policy “Shanghai [2009] No. 38” (valid until 15 August 2021), it was commonly understood that foreign employees working in Shanghai had some flexibility in participating in the Chinese social security system. They could opt to contribute to pension, medical and work injury insurance, and agree the contribution arrangement with their employers.

Upon the expiration of the above local policy and the integration of foreign work permits and China social security cards, it is expected that local authorities will implement more rigorous regulatory scrutiny and stricter practice requirements. Consequently, we highly recommend the following key action points for companies and foreign employees:

• Conduct a comprehensive assessment of all foreign employees, including locally hired foreign employees and international assignees to verify their compliance status of their China social security contributions and their alignment with their work permits.
• Evaluate the financial implications for both the company and the individual employee, and develop a strategic plan for engaging with local authorities to rectify and mitigate any potential risks, such as late payment surcharges and penalties.
• Provide clear and effective communication with foreign employees is crucial to ensure their understanding and compliance with the new policy.

Contact us

For a deeper discussion on the above, please reach out to your Vialto Partners point of contact, or alternatively:

Jacky Chu
China Lead Partner

Sheree Cang
China Immigration Partner

Gertie Chen
China Tax Partner

Further information on Vialto Partners can be found here: www.vialtopartners.com

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