The latest data from China’s Ministry of Human Resources and Social Security (MoHRSS) shows that China has distributed 42.3 billion yuan (US$6.2b) in employment stabilization allowances to some 3.2 million enterprises, covering over 85 million people.
Launched in 2014, the employment stabilization allowance aims to encourage enterprises to retain employees. The money comes from the unemployment social insurance fund which every enterprise pays into.
To help more firms return to normal and survive the economic slowdown caused by the Covid-19 pandemic, the MoHRSS loosened the baseline requirement for the allowance in 2020, stating that those whose layoff rate was no higher than the national average level of 5.5 percent can receive the funds. The unemployment rate is raised to 20 percent for small enterprises with under 30 employees.
The allowance has increased to at most six months of the unemployment insurance fee that the target enterprise has paid in 2019, especially for those engaged in medical equipment, public services and daily necessities.
The ministry said that the number of enterprises set to receive the allowance this year is three times that of 2019, and the average size of the beneficiary enterprises has narrowed to 27 employees per firm, meaning the allowance is being sent to more smaller enterprises.
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