Beijing Adjusts Maternity Insurance Policy

Starting on January 1, 2012, all company employees in Beijing – including  employees with non-Beijing hukous– are required to participate in the city’s maternity insurance program. The maternity allowance given to a female employee will be calculated according to the combined average monthly salary of all company employees during the previous calender year.

The Beijing Human Resources and Social Security Bureau (BHRSSB) released the “Circular on Adjusting the Municipal Maternity Insurance Policy for Employees (jingrensheyifa [2011] No.334)” on December 20, 2011. The document clarifies that all employees – if employed within a Beijing enterprise, government agency, institution, community group, private non-enterprise entity, foundation, law firm, accounting firm or individual business – shall be covered by maternity insurance.

According to Circular No.334, maternity allowance – which is defined as salary given to a female employee during her maternity leave – shall be calculated as follows:

• Maternity allowance = The combined average monthly salary of all company employees during the previous calender year ÷ 30 (days) × Duration of maternity leave

Previous to these new provisions, maternity allowance was calculated in accordance with the female employee’s own average monthly salary during the previous calender year and applied during the month the employee gives birth.

Under the new calculation system, a female employee shall still receive the maternity allowance in the amount derived from the equation above, even if her actual monthly salary level is lower than that standard. If a female employee’s actual monthly salary level is higher than the maternity allowance derived from the equation above, the company shall make up the difference in the two amounts; eliminating concerns over the possibility that senior-level employees may end up receiving less benefits during their maternity leave.

It is worth noting that if a female employee gives birth nine months after Circular No.334 takes effect, but has not made maternity premium payments for at least nine consecutive months, the maternity compensation shall be paid by her employer.

In the more recent “Circular on Operational Issues Concerning the Adjustments in Municipal Work-related Injury Insurance and Maternity Insurance (jingshebaofa [2012] No.2),” the BHRSSB further clarified the calculation of maternity allowance in every social insurance year: which runs from April to March of the following calender year.

A company’s monthly average wage base for maternity premium payments refers to the amount of the company’s average premium payment base adopted during the first month of every social insurance year. The amount of maternity allowance during the same social insurance year shall be calculated accordingly.

Employers shall complete the maternity insurance registration before January 20, 2012 for its employees with non-Beijing hukous who previously participated in social insurance, but were excluded from maternity insurance coverage. Any employer that has failed to complete such registrations before that date will be required to pay a late fee at a daily rate of 0.05 percent.

---