Foreign employees working in China have been required to pay into the country's social security system since Oct. 15, according to a latest social insurance regulation.
Once the details are rolled out, more than 230,000 foreigners in China will be included in the country's welfare system for pension, medical insurance, unemployment, work injury and maternity benefits.
The new scheme will be implemented by local governments before the end of this year, but companies will have to back-pay contributions from Oct. 15.
In Beijing, the salary cap for paying social insurance is 12,603 yuan (2,000 U.S. dollars) in 2011. For a foreign employee earning that or higher, his employer has to pay about 4,096 yuan every month, and the employee himself needs to pay about 1,326 yuan.
Some foreigners believe the implementation of the new regulation is still short on details, and worry they may not receive the benefits after joining the network.
For instance, a foreigner who loses a job in China instantly loses the right to live here, and it is still unclear how he or she is going to benefit from the unemployment insurance and retirement pension.
At a press conference held on Oct. 28, Xu Yanjun, deputy director of the National Social Security Management Center of the Ministry of Human Resources and Social Security, admitted that the system needs to be improved to function more efficiently.
However, China created its basic social security system just several years ago and is still working on strengthening the system. The imperfection of the system should not eclipse the necessity for foreigners being included, nor should it justify the rejection of the plan.
The lack of social security for foreign workers may lead to many labor disputes. It is an international norm to protect employee's rights, regardless of whether they are foreigners or locals.
In the U.S. and Europe, it is a common practice to treat foreign and domestic workers equally and entitle them to the same social security norms, allowing foreigners the same social welfare benefits as nationals.
"There's nothing wrong with the country making sure that everyone has basic insurance." K. Lesli Ligorner, an attorney in Shanghai for Paul Hastings, was quoted by USA Today as saying.