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New PRC Social Insurance Law: Working in China Becomes More Costly to Foreign Employees and Employers

In the past few years China has taken steps in its legislation that have made it more expensive for foreign employers and employees to do business there. The passing of the new PRC Social Insurance Law, which took effect on July 1, 2011 is just one of those steps. The new PRC Social Insurance Law requires expatriates working in China to pay a heavy tax burden to ensure that all employees in the PRC are insured with health and welfare benefits. However, since most international assignments do not last longer than an average of three years, these foreign employees may never reap the benefits of this insurance.

Gray v. Citigroup, Inc., No. 09-3804 (2d Cir. Oct. 19, 2011); Gearren v. McGraw-Hill Cos., Inc., No. 10-792 (2d Cir. Oct. 19, 2011)

The Second Circuit becomes the latest U.S. Court of Appeals to join the fray about whether to adopt what is known as a "presumption of prudence" under ERISA. The rule favors plan fiduciaries who allow investment in company stock in an employee stock ownership plan (ESOP), despite knowing that the company stock is very risky. In two divided opinions, the panel adopts the presumption of prudence over a sharply-worded dissent.

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