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China: Guangdong Launched Special Operation to Crack Down on Illegal Participation in and Supplementary Contribution of Social Insurance

Authors: Carol Zhu and Yinbing Chen

The Human Resources and Social Security Department of Guangdong Province recently decided to launch a special operation across the whole province to crack down on illegal participation in and supplementary contribution of social insurance which will last till December 2022.  The special operation will mainly crack down on the illegal handling of social insurance participation and supplementary contribution of social insurance premium which are committed through fabricating employment relation, forging certificate documents or other illegal means.  Those actions that will be especially cracked down on include (1) providing services of organisation, introduction, agency, document fabrication by profitable human resource service agencies, labour dispatchment companies or individuals for illegal social insurance participation or contribution; (2) online publicising illegal agency that handles with supplementary contribution of social insurance premium; (3) handling social insurance participation and supplementary contribution by relying on legal documents obtained through false labour supervision, labour arbitration, or court proceeding; (4) falsifying employment relation to participate in unemployment insurance or defrauding unemployment insurance benefits by fabricating materials of employment termination.

Key Action Points for Human Resources and In-house Counsel

It is not rare in practice that employers use the help from human resources agencies to arrange social insurance contribution for employees working in different cities where the employers have not established a local subsidiary or branch office.  Such arrangement is likely to violate the social insurance regulations.  Thus, it is advisable for employers in Guangdong Province to conduct self-inspection and ratification regarding social insurance contribution and avoid potential legal risks.