COMPANIES in Shenzhen could be required to pay more for employees social insurance to reduce the city s insurance fund losses as a result of employees transferring their social insurances to other cities.
According to a new regulation to be announced soon, companies should pay 13 percent of an employee s salary every month, 3 percent more, yesterday s Shenzhen Special Zone Daily reported.
The premium for social insurance is now 18 percent of an employee s monthly salary, of which the employee pays 8 percent and the company 10 percent.
According to the new regulation, the amount paid by employees would be the same as before.
Many companies disagreed with the new regulation, saying the increase in company monthly payments could greatly increase labor costs.
However, the city s social insurance authority said the existing rate was far lower than the national average. At the moment, the average amount paid by companies nationally is 18 percent of an employee s monthly salary, while the average amount in Guangdong Province is 15 percent. So even if the percentage is increased to 13 percent, Shenzhen companies still pay less compared with other cities, an unidentified department official told the newspaper.
With such a low rate, if an employee transfers its social insurance to other cities in Guangdong, the city s social insurance fund should pay the other city to cover the difference, which would have many hidden problems for the insurance fund, the official said.
Meanwhile, the minimum insurance for both hukou and non-hukou employees would be 40 percent of average monthly incomes in the previous year, according to the new regulation.
At the moment, there are differences between hukou and non-hukou holders and we adjust the regulation to unify the payment rate, the official said.
Under the new regulation, there would be two means to pay the insurance. An employer could either pay 13 percent of the total salary of its employees or pay separately 13 percent of each employee s income of the previous month. (Wang Yuanyuan)
