IMPACT – HIGH
What is the change? The State Council recently indicated that China will soon waive work permit requirements for residents of Hong Kong, Macao and Taiwan.
What does the change mean? Individuals holding a Mainland Travel Permit for Taiwan Residents or a Mainland Travel Permit for Hong Kong and Macao Residents will soon be able to work in mainland China without obtaining work authorization. Some cities, including Shenzhen and Guangzhou, have stopped issuing work permits to these residents. Other cities, including Beijing and Shanghai, continue to require work permits pending further notice. The Ministry of Human Resources and Social Security is expected to issue a regulation by the end of the month lifting work permit requirements for residents of Hong Kong, Macao and Taiwan across the mainland.
Background: The State Council announced on Aug. 3 that it would stop issuing work permits to residents of Hong Kong, Macao and Taiwan, providing an indication that such individuals will no longer be required to obtain work authorization (like foreign nationals do) to work in mainland China. Even after this change takes effect, however, residents of Hong Kong, Macao and Taiwan will still be required to meet other entry criteria before they can legally enter and work in mainland China. Authorities may also set up a new registration process, though details on this are not yet known.
BAL Analysis: The waiver of work authorization requirements for residents of Hong Kong, Macao and Taiwan is a major change that will mean, among other things, that these workers would be fully protected under Chinese labor and labor contract law. And while it will generally be easier for employers to employ residents of Hong Kong, Macao and Taiwan, they may see increased costs related to social insurance and housing fund contributions. Employers will likely have the option of assigning such workers to third-party employers, whereas now they can only work for the company sponsoring their work permit. Additional details are expected in the coming weeks as Chinese authorities will move to implement this change. BAL will continue following developments and will provide updates as information becomes available.
This alert has been provided by the BAL Global Practice group in China. For additional information, please contact firstname.lastname@example.org.
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