Guides - Human Resources & Payroll in China 2016

- Human Resources and Payroll in China 2016-2017 (5th Edition)

Unlike in earlier days of the People’s Republic, the hukou no longer formally restricts Chinese citizens

from seeking employment outside their hukou region. However, the hukou determines a citizen’s

entitlement to social welfare and other benefits, such as the housing fund and education. Therefore,

somebody who works outside his/her hukou region will generally not be able to participate in the

social benefits of the employment region.

In July 2014 the State Council announced a series of changes to the hukou system in a move to

help migrant workers access services and social welfare. However, this is expected to have limited

impact, since the reforms include exemptions for major cities, which are generally more attractive

to migrants. Many of those who have gained urban hukou in recent years are workers resettling

to small urban centers close to their original residency, but moving across provinces or into major

cities will still remain a difficult issue.

However, there aremeans to bridge this discrepancy by formally employing staff in their hukou area

either through a branch office or through an employment agency, but having themwork in another

location. Furthermore, the employer can financially compensate workers for the disadvantage of

not being able to optimally participate in the social benefits scheme. This can further trigger the

decision of candidates with hukou fromother regions to join a company despite the disadvantages.

FOR MORE INFORMATION

Contact

Neil Huang

Consultant

Direct HR

+ 86 21 6010 5086