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Beijing to increase municipal minimum wage, pensions and welfare benefits

The Beijing authorities will on 1 January increase the city’s minimum wage for a second time in six months. The monthly minimum wage will go up by 200 yuan to 1,160 yuan, making it the highest in the country.

In addition, the monthly pension for retired enterprise workers in the city will go up by 10.2 percent to 2,268 yuan, the disability allowance for injured workers will increase by 13.8 percent to 2,504 yuan per month on average, and monthly unemployment benefits will be raised on average by 17.5 percent to a maximum of 861 yuan for workers with more than 20 years of contributions.

In total, the Beijing Municipal Human Resources and Social Security Department announced six new measures, all of which will go into effect on 1 January, to strengthen its social welfare safety net as price rises begin to hurt the city’s most vulnerable.

The department estimated that some 1.9 million retirees would benefit from the pension increase, along with an additional 210,000 urban and rural residents who would get a 30 yuan increase in their basic state pension to 310 yuan per month. Currently there are 10,658 Beijing residents on disability benefits and around 100,000 workers receiving unemployment benefit, it said.

The city’s new comprehensive welfare package reflects not only the municipal government’s but also the national government’s concerns over inflation, the growing gap between rich and poor, and the need to boost consumer spending.

Cities and provinces across the country increased the minimum wage last year by an average of 24 percent and several provinces such as Guangdong are considering a second increase next year.  Sha’anxi has already announced another 100 yuan across the board increase in the monthly rate to go into effect 1 January, following a 160 yuan increase on 1 July this year.

The only jurisdiction not to increase its minimum wage last year, Chongqing, will belatedly increase the monthly rate by 190 yuan, bringing the municipality’s minimum wage to between 750 yuan to 870 yuan per month, still relatively low by national standards.

In addition to increases in the minimum wage and welfare benefits, the revised Work-related Injury Insurance Regulations, which will also go into effect on 1 January, will increase compensation payments for accidents and occupational illness, broaden insurance coverage, and hopefully simplify claims procedures.

The coverage of work-related insurance will be expanded to include not just enterprises, but public institutions, law firms and accountants, non-governmental and other social organizations, as well as small private businesses. Moreover, the definition of “work-related injury” will be expanded to include all employees injured on their way to and from work, as well as those who were injured as a result of their own criminal negligence.

In an attempt to simplify procedures for work-related injury claims, the new regulations state that in straightforward cases, where the facts are clear, a determination of work-related injury should be made within 15 days of the application. If either party disagrees with the determination, they can ask for an administrative review or file an administrative lawsuit in the civil courts.

The level of compensation awarded to victims will also increase. For example the one off payment for the most serious injuries will be increased by three month’s salary, so that compensation for a Grade One injury will increase from 24 month’s to 27 month’s wages. Compensation for Grade Five and Six injuries will increase by two month’s salary, while lesser injuries will get a one month increase.

The one-off payment to families of victims of fatal accident will be standardized at 20 times the average disposable income of urban residents in the previous year, which at 2009 levels would put the amount at around 340,000 yuan, a significant increase on current levels, which vary from region to region but on average come to 102,400 yuan.