China: Beijing and Shanghai extend maternity leave by 30 days; parental leave entitlement introduced

Employer Action Code: Act

As part of a major policy shift on family planning announced earlier in 2021, married couples may now have up to three children. In support of this policy, some provincial and municipal governments, including those of Beijing and Shanghai, are expanding maternity leave entitlements provided by social security. Paternity leave entitlements have not been changed, but both city governments have introduced new employer-paid parental leave entitlements.

Key details

Beijing

• Maternity leave is increased to 158 calendar days (from 128 days) for births on or after November 26, 2021. The 158 calendar days include weekends and statutory holidays. The monthly benefit payable is the higher of company’s average monthly salary of all employees or the female employee’s wage at the month of delivery. Social security pays the portion up to three times last year’s monthly City Average Earnings (CAE), and the company pays the remainder, if any, above this cap (28,221 Chinese yuan). An additional one to three months of maternity leave can be granted if the employer agrees.
• New fathers and mothers are entitled to 10 working days of employer-paid parental leave in total per year for each child under age three, effective from the same date as the maternity leave extension. Any unused leave at the end of the anniversary year is lost.  
• If agreed by the employer and both parties, the extended maternity leave (60 days on top of the basic 98 maternity leave period) can be shared between the father and mother.

Shanghai

• Maternity leave is increased to 158 calendar days (from 128 days) for births on or after November 25, 2021, in which the basic 98 days includes weekends and statutory holidays, while the other 60 calendar days do not include statutory holidays.
• The monthly benefit payable is the higher of company’s average monthly salary of all employees or the female employee’s wage of the prior year. Social security pays the portion up to three times last year’s monthly CAE, and the company pays the remainder, if any.
• New fathers and mothers are also entitled to five working days of employer-paid parental leave separately per year for each child under age three, effective from the same date as the maternity leave extension. Any unused leave at the end of the anniversary year is lost.

Employer implications

The decision to allow married couples to have up to three children is intended to address demographic changes that have resulted in a shrinking (albeit still huge) workforce and rapidly aging population. The country’s birth rate dropped to 8.5 births per 1,000 people in 2020, the lowest rate in 40 years according to the government. Employers surveyed by Willis Towers Watson generally don’t provide paid maternity leave in excess of statutory requirements and rarely provide paid parental leave.

Companies with employees in Beijing and Shanghai should review their existing leave policies and budget planning to ensure that they comply with the new legislation. Since Beijing’s regulation is more flexible, i.e., extended maternity and parent leaves can be shared between the parents, as well as additional maternity leaves of up to three months (upon employer’s decision), employers will be required to make more detailed implementation rules and employee communications.