An Employee Refuses to Pay Social Insurance, Will the Employer be Liable?
In 2014, a company recruited Chen. Chen did not want to bear the individual payment part of the social insurance, and issued a “Commitment”, in which he said he would release the payment responsibility of the company voluntarily, and undertake the relevant adverse consequences. In 2017, Chen dissolved the labor contract with the reason that the company failed to pay the social security, and requested the company to pay the economic compensation. In practice, such case is not rare. Then, whether the labor arbitration committees or the courts will be in favor of the claim like Chen has requested?
It depends. Different cities may have different opinions, because the local judicial practical rules are different. Take some major cities for example. Such claim would be supported in Beijing. Article 25 of the “Answers to Several Issues Regarding Application of Law in Trial of Labor Disputes” issued by Beijing High People’s Court and Beijing Labor Arbitration Commission, states that such claim would be supported. Such claim would not be supported in Jiangsu province and Zhejiang province. Article 16 of the “Guidance on Several Difficult Issues in Trail of Labor Disputes” issued by Jiangsu Province High People’s Court and Jiangsu Province Labor Arbitration Commission, and Article 11 of the “Answer to Several Difficult Issues in Trail of Labor Disputes” issued by Zhejiang Province High People’s Court, both of the 2 articles state that such claim would not be supported. Such claim would be determined case by case based on the intention of the employer in Shanghai. Article 9 of the “Opinions on Several Issues Regarding the Implementation of the Labor Contract Law” issued by Shanghai High People’s Court states that if the employer is not subjective malicious, which says the employer could provide evidence to prove that the employee was not forced to do so, then the employee’s claim will not be supported. In Guangdong, such case would be decided with a pre-condition. Article 25 of the “Meeting Minutes Concerning Several Problems in Train of Labor Disputes” published by Guangdong High People’s Court, states where an employee goes back afterwards, and requires an employer to pay social insurances, the employer refuses to pay in a reasonable period, then the court would be in favor of the employee’s claim.
However, according to Article 72 of the “Labor Law” and the “Social Insurance Law”, the social insurance is the employee’s statutory benefit, in addition, it is also the statutory duty for both employee and employer, which means it is still risky even an employee proposes not to pay the social insurance voluntarily. Although the employee’s claim for economic compensation might not be supported in many cities, if the employer does not pay the social insurance, it may face the following risks:
Firstly, the employer might be punished by the administrative authorities. According to the “Social Insurance Law” and the relevant regulations, where an employer fails to pay social insurance on time or in full amount, the collection agency of social insurance shall order it to pay or make up the deficit of premiums within a prescribed time limit, and impose a daily late fee at the rate of 0.05% of the outstanding amount from the due date; and if it still fails to pay the premiums within the prescribed time limit, the relevant administrative department shall impose a fine of 1-3 times the outstanding amount upon it.
Secondly, the employer might have to compensate the relevant social insurance treatment to the employee. Where an employer fails to pay social insurance, although an employee promised to undertake the relevant consequenses, if any disputes related to such treatment, such as the maternity allowance, work injury treatment, etc., in the judicial practice, normally the employer might be ordered to undertake the proportion which shall be undertaken by an employer under the social insurance system.