Firms face crackdown over social security payments

PUBLISHED : Tuesday, 25 September, 2001, 12:00am
UPDATED : Tuesday, 25 September, 2001, 12:00am

The Labour and Social Security Ministry is planning to get tough on some mainland companies - especially small businesses and self-employed entrepreneurs - for failing to contribute to the social security fund.

The number of people making payments to the fund fell by 1.55 million to 81.6 million during the first half of the year, as payments by mainland enterprises fell even further behind, China Central Television reported on the weekend.

It was the first time the number of participants in the social security fund had fallen since it was introduced in late 1993. The ministry held a seminar in the northeastern city of Dalian last week to discuss the overdue payments and possible solutions to the problem.

In what appeared to be an attempt to publicly humiliate the companies in question, the ministry named the worst offenders - 20 Chinese enterprises that were each at least 10 million yuan (HK$9.3 million) in arrears.

Most of the companies were state-owned, including Beijing Urban Construction Group - a company under the Beijing Municipal Government. The ministry did not say what sort of punishment these companies could expect.

During the three years to December last year, the ministry used the fund to train or employ 15 million workers who had been laid off, while 18 million other unemployed workers and 30 million retirees depended on the fund for welfare benefits, Xinhua reported.

It said because of the shortfall in funds, some retirees did not get paid on time, or received no payments at all. In the northeastern province of Heilongjiang, the Government owed these people a total of 123.2 million yuan.

According to a survey the ministry conducted in 10 cities, social security and unemployment benefits were the main concerns of the jobless.

More than 70 per cent of laid-off workers said they had trouble getting their benefits because their former employers failed to make contributions to the fund.