China: Beijing Municipal Human Resources and Social Security Bureau Strengthens Supervision and Prohibits the Social Insurance Contribution on Behalf of the Employer

Recently, the social insurance center of Daxing District, Beijing Municipality, released a circular called Reminder of Adding New Employees by Labor Service Dispatch Company and Human Resources Service Company (the “Reminder”).  The Reminder requires that from 5 July 2020, when labor service dispatch company and human resources service company register or add new employees to the social insurance scheme, they shall distinguish “employees” from “dispatched employees” firstly; then, especially, for “dispatched employees”, they shall report the information of the actual receiving entity to complete the procedure of adding new employees to the social insurance scheme.  If the receiving unity is not registered in Beijing, it may not be able to complete the registration and add new employees to the social insurance scheme.  In light that Beijing Municipaly Human Resources and Social Security Bureau has specified in a circular issued in December of 2019, that enterprises engaging in labor service dispatch “shall not undertake business such as HR agency, especially the service of social insurance agency on the excuse of possessing the qualification of labor dispatching business.”  Therefore, the new social insurance policy of Beijing Municipality may put an end to the contribution of social insurance on behalf of the employer in practice.

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