Q: Who do the changes affect?
A: The new regime applies to all employers and individuals in China, including employees, self-employed individuals with no employees and part-time and flexible employees.
Individual contributions are transferable for cross-region employment and contributions made by employers are integrated into the social insurance fund of the region where the employer is registered.
Q: What are the Collection measures?
A: Mandatory collection powers are granted to the social insurance agencies to enable them to collect the premiums including a power to:
order the bank or financial institution of the employer to transfer any unpaid contributions by obtaining an administrative order from competent government authorities;
request the employer to provide collateral and sign an agreement for delayed payment; and
apply to the court for seizing and auctioning the employer’s property.
These measures are based on the mandatory registration of the employer with the local agency within 30 days of the business licence being issued to the employer or any change to the registration items (e.g. new employee name list).
Q: What are the Penalties?
A: Employers who fail to comply with their obligations will be exposed to greater penalties. A fine equivalent to 1-3 times the outstanding contributions will be imposed for failure to register for social insurance and for failure to remedy this within a specific time-limit. Those personnel who are directly responsible may also be held liable. A late payment fee of 0.05% per day will be charged should an employer fail to make contributions in full and on time.