Maternity Leave and Payment: A Comparison of Relevant Rules in Mainland China and Hong Kong

Maternity leave and payment management is a challenging part in female employee management, especially for companies operating in multiple locations. In the greater China area, policy differences exist between mainland China and Hong Kong, as well as among mainland China provinces and cities.

With female employee accounting for 43.5 percent and 50.3 percent of mainland China and Hong Kong’s total labor force, and the fact that both jurisdictions are making efforts to increase the birth rate, employers are suggested to pay more attention to maternity leave and payment management – both to be compliant and attract talents.

In this article, we compare the maternity leave and payment rules in mainland China and Hong Kong. For easier illustration, we have picked the four top cities—Beijing, Shanghai, Guangzhou, and Shenzhen—as the representatives of mainland cities.

Maternity leave days

Mainland China

In mainland China, maternity leave includes two parts – the basic maternity leave and the extra maternity leave. The basic maternity leave is granted by the State Council as stipulated in the Special Provisions on Labor Protection for Female Employees (State Council Decree No. 619), which is 98 days for normal birth. In the event of dystocia or multiple births, female employees are eligible for longer maternity leaves. In case of miscarriage or abortion, the female employee can be granted 15-days maternity leave for pregnancy shorter than four months, and 42-days maternity leave for pregnancy reaching four months.

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The extra maternity leave is granted by the local government (varies from provinces to provinces) to incentivize birth giving, which generally ranges between 30 days and 90 days. Generally, the extra maternity leave is only granted to those who gave birth to children in accordance with the family planning policy and related regulations.

Employees can choose to start the leave 15 days prior to the expected date of childbirth.

Hong Kong

In Hong Kong, the Employment (Amendment) Ordinance 2020, which extends the statutory maternity leave from 10 weeks to 14 weeks, took effect on December 11, 2020. Since then, an employee who becomes pregnant is entitled to:

• A continuous period of 14 weeks’ maternity leave;
• If childbirth occurs later than expected, added leave until the child is born; and
• An additional leave of maximum four weeks for illness or disability due to the childbirth.

The employee may decide to take leave two to four weeks prior to the expected date of childbirth, with the agreement of the employer. In absence of such a decision, leave starts four weeks prior to birth. If childbirth occurs earlier than expected, that day is the starting day of the maternity leave.

Maternity leave pay

Mainland China

In mainland China, for the basic maternity leave, the female employee will receive a maternity allowance in lieu of salary, if the employee has participated in maternity insurance for a certain period, as required by the local maternity insurance scheme. This allowance, together with certain amount of the medical expenses for delivery, will be borne by the local social security bureau. But for female employees not covered by the maternity leave, the cost shall be borne by the employer.

The Special Provisions on Labor Protection for Female Employees (State Council Decree No. 619) provides a general rule for calculating maternity allowance:

• For female employees not covered by maternity insurance, the maternity allowance shall be paid by the employer based on the female employee’s wage prior to her maternity leave (hereinafter, female employee’s salary”);
• For female employees who are covered by maternity insurance, the maternity allowance shall be paid out from the maternity insurance fund by local social security bureau based on the average monthly wage of the employer’s staff (i.e., the average monthly salary of all employees in the company, hereinafter, “company average salary”) for the preceding year. The general formula for calculating maternity allowance of female employees who are covered by the maternity insurance is:

MATERNITY ALLOWANCE= COMPANY AVERAGE SALARY FOR THE PRECEDING YEAR ÷ 30 × MATERNITY LEAVE DAYS

There is no general rule on whether maternity allowance covers the extra maternity leave granted by local government. In practice, it varies from province to province, or even city to city. For example, in Beijing, for the extra maternity leave of 60 days, only the first 30 days are covered by the maternity insurance fund; in Shenzhen and Guangzhou, only basic maternity leave days are covered by the maternity insurance fund; in Shanghai, both the basic leave days and extra maternity leave days are covered by the maternity insurance fund. In cities where the extra maternity leave is not covered by the maternity allowance, the employer will need to pay for the salary of the employee during the extra maternity leave.

In certain cities, the calculation method of maternity leave pay is more sophisticated. For example, in Beijing, the maternity allowance calculation base is the company average salary in the last month of the female employee’s pregnancy, rather than for the preceding year. Besides, if the maternity allowance paid out from the maternity insurance fund is less than the female employee’s salary, the company needs to pay the difference.

In Shanghai, the social security bureau will cross-check the company’s average wage for the preceding year, the social average salary in the bureau’s jurisdiction, and the female employee’s salary：

• Where the company average salary for the preceding year is no more than three times the social average salary in the bureau’s jurisdiction, the maternity allowance paid by the bureau will be calculated based on the company average salary;
• Where the company average salary for the preceding year is over three times the social average salary in the bureau’s jurisdiction, the maternity allowance base will be capped at three times the local average salary, and any amount beyond that will paid by the employer itself;
• If the maternity allowance paid by the bureau is lower than the female employee’s salary, the remainder should be paid by the employer; and
• In addition, the maternity allowance is subject to minimum standards – maternity allowance generally cannot be lower than 60 percent of the local social average salary.

In Guangzhou and Shenzhen, if the maternity allowance paid out from the maternity insurance fund is less than the female employee’s average salary in the 12-month period preceding the maternity leave (for those who have been employed for less than 12 months, the calculation shall be based on the actual employment period, hereinafter, “female employee’s average salary”), the company needs to pay the difference.

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As to the application, in most cases, employers help to apply for maternity allowance on behalf of their female employees. But again, there are local variances. For example, female employees in Shanghai apply for maternity allowance by themselves and the social insurance bureau shall transfer the maternity allowance amount to the employee’s personal account directly. The employer is just bound to pay the difference if the female employee’s salary is higher.

In cities where the maternity allowance is paid to the female employee through the employer, the actual payment could be made during the maternity leave or after the end of maternity leave. In this case, should employers pay maternity allowance to employees on normal pay day if they haven’t received maternity allowance from the maternity insurance fund? The answer is yes in Beijing, Guangzhou, and Shenzhen, but Shanghai does not require it. Companies that operate in different cities will need to check local policies.

Hong Kong

In Hong Kong, a female employee is eligible for maternity leave pay if she has been employed under a continuous contract for not less than 40 weeks (working a minimum of 18 hours per week) immediately before the commencement of scheduled maternity leave and she has given notice of pregnancy and her intention to take maternity leave to her employer after the pregnancy has been confirmed.

The daily rate of maternity leave pay is a sum equivalent to four-fifths of the average daily wages (ADW) earned by the female employee in the 12-month period preceding the first day of the maternity leave. If an employee is employed for less than 12 months, the calculation shall be based on the shorter period. Moreover, to be noted, the maternity leave pay for the period from the 11th week to 14th week is subject to a cap of HK$80,000.

Maternity leave pay should be paid on the normal pay day of the employee by the employer. Employers, after payment of all maternity leave pay, may apply to the government for reimbursement of maternity leave pay for the 11^th to 14^th week, which is also subject to a cap of HK$80,000. Employers should submit applications not later than three months after the last day of the employee’s 14 weeks’ statutory maternity leave under Employment Ordinance.

“Wages” in Hong Kong means all remuneration, earnings, allowances, tips, and service charges, however designated or calculated, payable to an employee in respect of work done or work to be done. But it does not include: 1) commission, attendance allowance or attendance bonus which is of a gratuitous nature or is payable only at the discretion of the employer; 2) end of year payment, or annual bonus which is of a gratuitous nature or is payable only at the discretion of the employer; 3)the value of any accommodation, education, food, fuel, water, light, or medical care provided by the employer and so on.

Below is a simple comparison for a quick look.

Tips and summary

Maternity leave management is not an easy task in either mainland cities or Hong Kong. Based on our practical experience, we offer some tips for companies operating in each jurisdiction.

In Mainland China, companies are suggested:

• Enroll the female employee on the maternity insurance scheme as soon as possible, after they join the company.
• Look into the local policy to identify the entitled amount of maternity leave days.
• Look into the local policy to understand whether it is compulsory to pay the difference between maternity allowance and normal wage.
• Look into the local policy to identify if it’s compulsory to pay maternity allowance to employees on normal pay day if they haven’t received maternity allowance from the maternity insurance fund.
• Apply for maternity allowance in time.
• Follow the most updated policy—the maternity leave days and the calculation of maternity allowance may change from time to time, especially when the government is determined to encourage fertility.

In Hong Kong, companies are suggested to:

• Maintain the payroll detail in the rolling 12 months.
• Identify which incomes belong to the wage category to calculate maternity leave pay correctly. For example, the annual bonus, which is of a gratuitous nature or is payable only at the discretion of the employer, does not come under wages.
• Prepare as soon as possible the payment proof of 14 weeks’ maternity leave pay, the employee’s pregnancy proof, employment contract, and the employee declaration form. There are only three months to submit the reimbursement application of maternity leave pay. The employee declaration form could be downloaded from the official website and needs to be signed by the employee, so it is advised to arrange the employee to complete this form prior to the commencement of her maternity leave if possible.
• Maternity leave pay should be paid on normal pay day.

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