According to the government several days ago, companies can delay contribution to pension funds and reduce the rates of various kinds of employee insurance. This move aims to stem rising job losses as the global downturn covers China’s economy.
Jobs can be secured by companies paying hundreds of billions of yuan less in insurance and pension payments, said threekey ministries in a statement.

They said that the rates of basic medical, unemployment, workplace injury and maternity insurance for urban residents can be reduced (in some areas) by a proper margin for a maximum of 12 months next year.

The Ministry of Human Resources and Social Security, the Ministry of Finance and the State Administration of Taxation said companies in financial difficulties can delay payment of social security funds for up to six months.

But, the statement said, without elaboration the criteria of “financial difficulty”, the rate of contribution to pension funds should not be cut.

Typically, 20% of an employee’s basic salary are paid by companies to the pension fund while 8% by employee.

Medical insurance comprises payments of 6% of the salary by a company and 2% by the employee.

The ministries will also allow local governments to use unemployment insurance funds to subsidize jobs at struggling companies for a maximum of six months. But only companies that promise not to lay off workers or cut only a small number of jobs will be subsidized.

At the same time, all the measure should not decline people’s social security benefits and cause a shortage of the funds that back social welfare.

Other measures include:

• Setting up of special funds to help train workers;

• Encouraging employers and employees to negotiate and sign economic compensation agreements on job cuts.

The moves above are the latest ones from central government to help raise the rate of employment.

Before the Spring Festival, hundreds of thousands of more than 200 million migrant worker have lost their jobs and have had to go back home.

The rate of China’s urban registered unemployment stood at 4% in the third quarter, but may rise in the next quarter, according to officials earlier.

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