NEW LEGISLATION YOU NEED TO KNOW House Funds Plan / 深圳市住房公积金制度改革方案 深府[ 2009]107号; By Ella Xu

A 17 year old law previously existing in name only in Southern China, about House Funds, will be modified and actually enforced starting in 2009. This will create another major impact to most of the companies that are already starting to follow the new nationwide Labor Law and Labor Contracting Law of PR China in 2008.

Those 2008 amendments created things like a Labor Arbitration Tribunal, seeking to protect workers rights against abusive employers, required actually writing down employment agreement (imagine that!) and other basic and objectively reasonable sets of protections. We have been a long standing supporter of those amendments, which were an unfortunate necessity based on the way some employers treated their employees.

In Shanghai, Beijing and Zhejiang Province, the House Funds Law – a component of the Chinese ‘social insurance’ framework – had been implemented (and actually followed) very well in the past years. Almost all of the local enterprises there, including both state-owned and private companies, have already been paying into the house funds program for their employees. That rate was set at 13% and was carried by the employer 100%.

But down here in Shenzhen, because of some particular local political reasons, only a few owners paid into this savings program for their employees and the local government did not require mandatory compliance before. It was one of those pieces of legislation that existed in writing only and neither private enterprise nor the government paid any attention to it. This reminds one of the Chinese saying, the sky is wide and the Emperor is far away.

From May 2009, the Shenzhen Government changed the current situation and has publicized a rather innovate plan where the amounts paid are quite a bit lower and the burden is shared by both the employer and employee.

【2009(107)】 . Hereinafter is the abstract of this new plan.

3、住房公积金缴存主体
Deposit subject of housing accumulation fund
我市国家机关、国有企业、城镇集体企业、外商投资企业、城镇私营企业及其他城镇企业、事业单位、民办非企业单位、社会团体及其本市户籍的在职职工均须缴存住房公积金。非本市户籍在职职工所在单位可参照有关规定为非户籍职工缴存住房公积金。
The local government organs, state-owned company, investment of town cooperative, foreign investment enterprise, town private business and other town business, institutional unit, unit run by the local people, social group and other native on-the-job workers must deposit the housing accumulation fund. The unit can refer to relative principles deposit the housing accumulation fund for non- household register on-the-job workers.

其他企业、城镇个体工商户或自由职业人员可以申请缴存住房公积金。
Other enterprises, town individual industrial and commercial businesses or free-lance professionals can apply for housing accumulation fund deposit.

4、住房公积金缴存基数和缴存比例
The deposit base and proportion of housing accumulation fund
职工个人和所在单位按缴存基数的一定比例缴存的住房公积金,进入职工个人住房公积金账户,本息均归职工个人所有。
The individual workers and their units according to the deposit base to deposit a certain percentage of the housing accumulation fund. The fund deposit into the employees’ individual housing accumulation fund accounts, all principal and interest are owned by individual workers.

缴存住房公积金的月工资基数为职工本人上一年度月平均工资,职工月平均工资应按我市统计局规定列入工资总额统计的项目计算。住房公积金月缴存基数的上限,由市住房公积金管理委员会拟订,报市政府批准后实施。
The monthly wage base of the housing accumulation fund deposit means the average monthly wage of previous year for workers, and the average monthly wages of workers should be included in the city's Bureau of Statistics provides statistics on the calculation of total wages.

职工和单位缴存住房公积金的比例均不得低于5%,缴存比例上限由市住房公积金管理委员会拟订,经市政府审核后,报省政府批准实施。单位可根据情况,在规定缴存比例范围内选择。
The housing accumulation fund deposit ratio from both employee and unit shall not be less than 5%, the upper limit of the deposit ratio was draw out by the Municipal Housing Accumulation Fund Management Committee, audit by the municipal government, approval and put in practice by the provincial government. Under the circumstances, the unit can choose the proportion of deposit within the specified options.

缴存住房公积金确有困难的单位,经本单位职工代表大会或者工会讨论通过,并经市住房公积金管理中心审核,报市住房公积金管理委员会批准后,可以降低缴存比例或者缓缴;待单位经济效益好转后,再提高缴存比例或者补缴。
If the unit inconvenient on the housing accumulation fund deposit, discussed and adopted by the unit of employees or unions on behalf of the General Assembly, audited by the Urban Housing Accumulation Fund Management Center, approved by the Urban Housing Accumulation Fund Management Committee, can reduce the proportion of deposit or postponement; if the economic efficiency has improved, to increasing the proportion of deposit in further or make a supplementary payment.

5、住房公积金金融业务
The finance operation of the housing accumulation fund
住房公积金管理委员会按照有关规定确定受委托商业银行(简称受托银行)办理住房公积金金融业务;住房公积金管理中心按规定向参加住房公积金的职工发放低息的购房贷款,并委托受托银行办理住房公积金贷款、结算等金融业务和住房公积金账户的设立、缴存、归还等手续。住房公积金实行“低存低贷”,存贷利率执行国家规定的利率。
The Housing Accumulation Fund Management Committee in accordance with relevant provisions, established by the commission of the Commercial Bank (the trustee bank) to handling the finance operation of housing accumulation fund; the Housing Accumulation Fund Management Center in accordance with the provisions to providing the low-interest housing loans to the staff who participate the Housing Accumulation Fund, and entrust the trustee bank to transacting the loan, balance of the Housing Accumulation Fund and other finance operations and the establishment of housing accumulation fund accounts, deposit, restitution and other formalities. Housing Accumulation Fund to implement the "low deposit low loan ", deposit and lending rates of the interest rate stipulated by the state.

6、住房公积金提取和使用
Extraction and use of housing accumulation fund
市住房公积金管理中心根据国家相关规定,并结合我市实际情况,制订规范住房公积金用于住房消费等相关项目的提取和使用管理办法,报市住房公积金管理委员会批准后实施。
The Municipal Housing Accumulation Fund Management Center in accordance with national relevant provisions, and combine with the urban actual situation, normative housing accumulation fund for housing consumption, and other related projects to extract and use of management practices, approved by the Urban Housing Accumulation Fund Management Committee, and then implementation.

7、住房公积金制度改革进程及制度建设
The process of system reformation and system construction to the housing accumulation fund
(1)2009年5月底前,公布方案并进行住房公积金制度改革的相应启动工作。
Before the end of May 2009, announce the plan and carry out the reform of the housing accumulation fund system.

(2)2009年6月-2009年12月底,由市国土房产局负责筹备成立市住房公积金管理委员会和市住房公积金管理中心。在上述两个机构成立之前,由市国土房产局(市房改办)具体负责住房公积金制度改革各项工作,研究制订住房公积金管理的有关具体办法和规程,做好全面实施住房公积金制度的基础性工作。
From Jun. 2009 to the end of Dec. 2009, the Municipal Bureau of Land Real Estate is responsible for land preparation for the establishment of the Municipal Housing Accumulation Fund Management Committee and the Municipal Housing Accumulation Fund Management Center. Prior to the establishment in these two institutions, the Municipal Bureau of Land Real Estate (Municipal Housing Reform Office) in charge of housing accumulation fund system reform works, and looking for housing accumulation fund management with the specific methods and procedures, make basic work for the full implementation of the housing accumulation fund system.

(3)自2010年12月起,市住房公积金管理委员会和市住房公积金管理中心正式运作。
Since Dec. 2010, the Municipal Housing Accumulation Fund Management Committee and the Municipal Housing Accumulation Fund Management Center operational.

(4)2010年内,根据我市住房公积金制度改革工作的进展情况,市政府组织相关部门起草我市住房公积金管理法规(草案)或规章。市财政、劳动保障部门配合做好我市现有住房公积金的清理、缴存转移等准备工作。
During the year 2010, according to the reform progress of the municipal housing fund system, the municipal government organize relevant departments to drafting the urban housing accumulation fund management rules (draft), or regulations. Municipal finance department cooperate with labor and social security department to dealing with the existing housing fund clean-up, deposit transfer and other preparations.

8、本方案自发布之日起施行。
This program implemented from the date of release.

Clearly, this will meet with some difficulty at the beginning of implementation. But it is coming.

So, we would suggest that all HR and Accounting managers remind their management to modify their budgets for Social Insurance and Personal Income Tax of all employees this quarter. If not, it is quite likely that an employer will lose a case canceling a Labor Contract or firing an employee if that employee chooses to file a claim at the Labor Arbitration Tribunal.