Employers in China may soon find it easier to employ disabled people, under a new master plan released last week by the government. China has had a minimum hiring quota for employing disabled people since 1995, under which companies are supposed to set aside at least 1.5 percent of their positions for disabled people. However, lack of enforcement meant that the regulations did not work in practice for almost two decades.

As a result, many companies lack a proper framework for hiring and supporting disabled people, and would rather pay the financial penalty for not meeting the quota as it is considered less costly than paying for disability benefits. Based on statistics from the China Disabled Persons’ Federation, there were at least 85 million disabled people in China at the end of 2018, but less than 10 million of them were employed. Other estimates have put the total number of disabled people as high as 200 million, meaning that less than 5 percent of this demographic are working.

The government’s new master plan aims to simultaneously increase the employability of disabled people and reduce the cost to employers of hiring them. It does so by targeting disability benefits: pegging the cost of these benefits to the local average wage, allowing companies greater flexibility in payment, and temporarily waiving the premiums altogether for small and micro enterprises. It also sets out milestones for increasing the number of training and job counselling services catering to disabled people, introducing the use of data analytics to track the hiring and employment needs of disabled people, and creating a tracking mechanism to assess the effectiveness of all these programs.

Most importantly, the master plan specifically states that government agencies, government-linked institutions, and state-owned enterprises must take the lead in employing disabled people. This has a certain significance in China’s economy, where the private sector tends to follow the lead of the government and SOEs.

The National Development and Reform Commission, one of the six agencies behind the master plan, said that the implementation of the plan would involve educating society to understand the objective of disability benefits and encouraging broader support for the employment of disabled people.