Guangdong will expand its unemployment insurance programme to cover migrant workers in the private sector from October 1 in an effort to bring more stability to the province, which has the country's largest private economy and migrant population.
The current scheme only covers migrant workers in government organisations and state-owned enterprises.
Under the new policy, workers who have spent at least one year with an employer will qualify for at least one month's unemployment benefit - equivalent to 80 per cent of the monthly salary.
Qualified jobless people can claim for compensation for up to a maximum of 24 months.
Beneficiaries who turn down jobs recommended by government placement agencies either twice in a row or three times in total will lose their benefits.
Private enterprises which choose not to join the new programme will be required to offer a lump-sum severance pay equivalent to 160 per cent of the worker's monthly salary.