2024 Year in Review – PRC Employment Law

The year 2024 witnessed various changes in employment law in the People’s Republic of China. This article summarizes the key developments from the past year and offers an outlook on the changes we have seen and further anticipate as we move through 2025.

January

On 10 January 2024, the Ministry of Emergency Management of the People’s Republic of China issued new workplace health and safety regulations: Regulations on Penalties for Production Safety Accidents, which apply to all employers. The regulations clarify the specific meaning of the four situations referred to as “delayed reporting, omission reporting, false reporting, and concealment reporting.” They also specify who may be held accountable and outline a range of fines – up to RMB 20 million- based on the severity of the accident. The new regulations took effect on 1 March 2024 and establish clearer accountability for reporting workplace accidents.

March

On 22 March 2024, the Cyberspace Administration of China issued Provisions on Promoting and Regulating Cross-Border Data Flows, clarifying scenarios that are exempt from security appraisals for cross-border data transfers, as a new step for the Chinese government to adjust control models in the field of cross-border data transfers.

The Provisions on Promoting and Regulating Cross-Border Data Flows introduce the following categories of “exemption scenarios”, under which pre-export data procedures are exempt:

1. data collected and generated in activities such as international trade, cross-border transportation, academic cooperation, transnational manufacturing, and marketing, which is provided abroad and does not contain personal information or important data;
2. personal information collected and generated overseas, transmitted to China for processing, and then provided abroad, where no domestic personal information or important data is introduced during processing;
3. where it is necessary to provide personal information abroad to conclude or perform a contract in which an individual is a party, such as cross-border shopping, mailing, remittances, payments, account opening, flight and hotel bookings, visa processing, and examination services;
4. where it is necessary to provide employees’ personal information abroad for cross-border human resource management in accordance with legally formulated labor rules and collective contracts;
5. where it is necessary to provide personal information abroad in emergencies to protect the life, health, and property safety of natural persons;
6. data processors, other than critical information infrastructure operators cumulatively providing personal information of fewer than 100,000 individuals (excluding sensitive personal information) abroad since January 1 of the current year; and
7. data processors in free trade zones providing data abroad that is not on the negative list.

This regulation signals that the Chinese government has relaxed its control over cross-border data transfers, exempting many common international affairs scenarios from the cross-border data transfer rules.

April

On 15 April 2024, the Supreme People’s Procuratorate, the All-China Federation of Trade Unions, and the All-China Women’s Federation jointly released an update on typical cases to safeguard the rights and interests of women and children. The typical case of protecting the special rights of “three period” female employees highlights the effective use of public interest litigation by the procuratorate to protect the special rights of female employees during pregnancy, maternity, and lactation (“three period”). Chinese laws clearly prohibit employers from reducing wages, dismissing, or unilaterally terminating the employment of female workers during any of the three periods. Through detailed investigations and collaboration with government agencies, the procuratorate reinforced legal protections for women, ensuring their rights are better safeguarded.

These cases highlight the importance for employers to pay attention to specific legal protections for female employees during the three periods and the need to establish corresponding internal policies and procedures applicable to “three period” employees.

On 26 April 2024, the Ministry of Human Resources and Social Security, Ministry of Finance, and the State Taxation Administration, jointly issued favorable policies in terms of unemployment insurance.

Key measures include: (1) continuing the reduced unemployment insurance contribution rate for employers and employees of 1% (in total, reduced from the original 1.5%) until 31 December 2025; and (2) extending the unemployment insurance job stabilization refund for eligible enterprises – a policy first introduced in September 2023 in favor of employers- under this policy, large enterprises could receive up to 30% and small and medium-sized enterprises up to 60% of their previous year’s unemployment insurance contributions; however, note that this program expired on 31 December 2024.

This serves as a reminder that employers can utilize these favorable policies to reduce their costs in terms of unemployment insurance.

On 30 April 2024, the Supreme People’s Court released six typical cases of labor disputes, summarized as follows:

1. an employer abused a contractor relationship to avoid employment;
2. upon the expiry of the second labor contracts, the employee keeps the discretion to require a permanent labor contract;
3. a court ruled that the scope of a non-compete obligation should be limited to a reasonable extent;
4. investing in the employer’s competitor by an ex-employee’s spouse constituted a breach of the non-compete obligation of the employee;
5. an employee leaving the employer refused to conduct a job handover which led to losses; accordingly, the court ruled that the employee should compensate the employer and;
6. an employee’s legal right to take paid paternity leave after the birth of his child cannot be rejected by his employer.

These cases not only involve the protection of the legitimate rights and interests of workers but are also closely related to the overall economic and social development of China.

June

On 14 June 2024, the Ministry of Human Resources and Social Security amended the Measures for the Application and Distribution of Unemployment Insurance Benefits, and the revised Measures took effect immediately. To implement the newly revised Administrative Reconsideration Law, the Ministry has decided to amend Article 27 of the Measures to add litigation as a means to resolve disputes over unemployment insurance benefits.  This signaled that going forward employees may bring more litigation in terms of unemployment insurance.

September

On 13 September 2024, the State Council’s Measures on Gradual Delay of the Statutory Retirement Age were approved. From 1 January 2025, the statutory retirement age will gradually be delayed over a 15-year period, to 63 for men, 55 for women in blue-collar jobs, and 58 for women in white-collar jobs. The minimum period to make contributions into pension funds in order to receive a monthly pension will also gradually increase from 15 to 20 years, starting from January 2030.

Flexible retirement shifts the retirement age from a fixed date to a range, which may increase management costs and complexity for employers. HR departments will need to verify employee information, consult with employees on retirement dates, and ensure timely processing to avoid errors. Employers may also consider adjusting their HR strategies – including recruitment, training, and promotion – to adapt to the varied retirement timelines.

Local practice for such new legislation includes, upon mutual agreement between employers and employees, employees’ statutory retirement age could be postponed up to 3 years.

On 27 September 2024, the Ministry of Human Resources and Social Security and the Ministry of Finance issued the Provisional Measures on Basic Endowment Insurance Disability Benefits for Enterprise Employees. The measures, which came into effect on 1 January 2025, fill the gap in protection for employees who become ill or disabled due to non-work-related causes before reaching the statutory retirement age, providing them with stable financial support.

December

On 10 December 2024, China rolled out a personal pension scheme in response to its aging population. All workers participating in urban employee or resident basic pension insurance can now join this supplementary pension scheme through designated online platforms or banks and enjoy applicable tax incentives, including deductible contributions and reduced withdrawal tax rates. This nationwide rollout incentivizes long-term retirement savings and provides employees with broader access to diverse financial products for pension planning. The scheme was implemented on 15 December 2024.

On 11 December 2024, the National Health Commission, in conjunction with the Ministry of Human Resources and Social Security, the National Center for Disease Control and Prevention, and the Federation of Trade Unions, issued an updated Occupational Disease Classification and Directory. The updated Occupational Disease Classification and Directory expands from 10 categories and 132 diseases to 12 categories and 135 diseases, including four open-ended provisions. It will come into effect on 1 August 2025.

2025 Outlook

We continue to anticipate various developments and changes in employment law in the People’s Republic of China in 2025, including the following:

• The statutory retirement age began to gradually increase with effect from 1 January 2025.
• Also on 1 January 2025, the Provisional Measures on Basic Endowment Insurance Disability Benefits for Enterprise Employees came into effect.
• In December 2024, the National Health Commission issued an updated Occupational Disease Classification and Directory, which expands the scope of occupational diseases. This update will come into effect on 1 August 2025.
• It is expected that the expansion of public interest litigation will play a role in enforcing labor protections, particularly for vulnerable employee groups such as female workers. This shift will allow advocacy groups and trade unions to initiate legal actions on behalf of these employees, ensuring that their rights are protected.
• It is expected that strengthened workplace safety regulations will be implemented in high-risk industries like mining and power engineering, with stricter safety standards, more frequent inspections, and harsher penalties for non-compliance. Employers in these sectors will need to enhance their safety protocols, provide regular training, and ensure proper compliance to avoid legal consequences and safeguard workers’ health and safety.