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2011-11-17 | All chapters

Insurance resolution draws mixed reaction
China Daily, 17th November 2011

Employees favor receiving coverage from employers,businesses worry about costs

BEIJING - Much debate has arisen recently over a draftregulation that would force employers to pay for twoadditional types of insurance for their employees.

The proposal, which the Ministry of Human Resources andSocial Security posted to the website of the State Council'sLegislative Affairs Office on Tuesday, would makeemployers responsible for providing five varieties ofinsurance to workers.

The two additions will be workman's compensation andmaternity insurance. The public has a month to commenton the proposal.

Workman's compensation insurance will enable workerswho have been injured at their jobs to receivecompensation and help in paying their treatment bills.Maternity insurance will allow working women to obtainsubsidized medical treatment and will give them variousbenefits during pregnancies. It will also allow future fathersto take a couple of days off work to accompany their wivesto the hospital for childbirth and to receive subsidies.

The year 1999 saw the adoption of a social insuranceregulation asking employers to pay for their workers'pension insurance, medical insurance and unemploymentinsurance.

"The new Social Insurance Law, which took effect in Julythis year, ensures that all employees have the right tothose five types of insurance," said Lu Quan, a socialsecurity expert at Renmin University of China. "This draft isa timely supplement to the law and could help betterprotect workers' interests."

Lu said most State-owned enterprises give theiremployees those five types of insurance. At many smallbusinesses, though, workman's compensation andmaternity insurance remain beyond the reach of workers.

In China, both workers and employers are now responsiblefor paying for pension, medical and unemploymentinsurance.

The cost of compensation insurance varies from industryto industry and place to place. In Guangzhou, capital ofGuangdong province, a business in the banking industrycan buy it for an amount equal to 0.5 percent of anemployee's monthly wages, while the rate is 1.5 percentfor a petroleum processing firm.

The fees for maternity insurance also vary but alwaysremain below 1 percent of a worker's wages.

Many employers, especially those who run small andmedium-sized businesses or private businesses, said theyfear that the cost of the two additional types of insurancewill prove to be a burden.

"We are already under huge pressure at this time, whenbusiness is not good," said Zhao Lingxi, who runs anadvertisement company in Shenzhen, Guangdong. "I'mworried that the additional insurance fees will make thesituation worse."

Zhao said her company, which employs about 30 workers,pays to provide employees with four types of insurance,but not maternity insurance.

"I think the government should take care of maternityinsurance, rather than the employer," she said.

"If the new rule is adopted, the expanded range of socialinsurance will definitely increase labor costs at mycompany," said Zheng Zhe, general manager of Gulifa Group, a hardware and tools maker inZhejiang province.

"If small and medium-sized enterprises have to pay extra social insurance fees for workers, thatwill bring more pressure on employers, who are currently having financial problems because ofinflation and higher labor costs," said Song Xiaohui, a senior officer with the Shanghai Smalland Medium-Sized Enterprise Development and Service Center.

Many workers, for their part, praised the change, saying it should have come much earlier.

"My company has not bought us compensation insurance," said Chen Xianlian, a worker at amotor-component plant in Southwest China's Chongqing municipality.

"My colleagues and I are hoping to get it and I'm glad that the insurance will become arequirement and that workers can get easier access to compensation and medical treatment inthe future."

Chen said she and her fellow workers do their jobs in a hazardous environment every day.Those who have been injured at that workplace often have only one avenue to obtaincompensation - through negotiations with their employers.

On Oct 15, foreign workers in China were placed into the country's social security system,meaning that every business that employs them must pay for their insurance.

Previous reports said the European Union Chamber of Commerce in China has encouragedthe Ministry of Human Resources and Social Security to give foreign companies more leeway tochoose how they will deal with insurance matters.

Philip McMaster, co-founder of the Beijing-based McMaster Institute for SustainableDevelopment in Commerce, praised the policy change.

"We should bear in mind that businesses run well only when workers are well protected," hesaid. "Workman's compensation insurance is a must."

Lu Quan said workers at small businesses, especially migrant workers in the mining andconstruction industries, will benefit the most if the draft rule is passed. They, he explained, workin dangerous workplaces and rarely have employers who give them workman's compensationinsurance.