A Review of the Procedures and Services of Social Security Repayment in Guangdong Province —- Summary of 15 Workers’ Demands for Pension Recovery

The full report (in Chinese only) can be downloaded here: 檢視廣東省社保補繳程序及服務-15 個工友追討個案綜述


Executive Summary

In Guangdong Province, migrant workers are often deprived of their pension insurance, and employers illegally owing them pension contributions have been rampant. In recent years, many workers have demanded the recovering of social security payments. This becomes a trend in workers’ rights protection and has gradually captured our attention.


From the end of 2019 to mid-2020, we conducted in-depth interviews with more than ten workers who are or were in the process of recovering pension insurance in Guangzhou, Dongguan, Shenzhen and Huizhou. In this report, we focus on these four aspects: 1. workers’ understanding of the pension system and their own rights; 2. actions taken to recover social security contributions; 3. different experiences that male and female workers may encounter; 4. respondents’ retirement plans and the influence of pension insurance to them. The following are the four main challenges that we have found regarding the social security payment:


1. There is room for improvement regarding the service quality of social security agencies

It is strenuous for workers to get sufficient support when they seek help in the social security agency about their payment to the bureau. They tend to give up when the staff don’t provide information or answer them in a bad attitude. As sufficient legal knowledge is rarely provided by the staff, workers are not familiar with all the conditions that need to be met for a successful recovery of pension contributions.


2. Unreasonable requirements of the repayment procedures and lack of mandatory enforcement against enterprises

The factory rarely signed labor contracts for employees in the early days and failed to provide employees with copies even if they did. Besides, the companies are only obligated to keep the wage payment account for two years. For cases of pension arrears that began more than 10 or even 20 years ago, it is difficult for both employers and employees to provide all the necessary documents to the Social Security Bureau.


Besides, even if the employers are keeping these documents, the law does not require them to provide these documents. Under this circumstance, whether the recovery procedure can continue depends on the employer. If they do not provide employees with the required documents, the workers will still be unable to make up for the arrears. Some companies require their workers to promise to pay the debts owed by the company before they are willing to provide the workers with supporting documents.


3. Problems encountered in labor arbitration

In the interview, some workers needed to confirm the duration of the labor relations with the employers through labor arbitration, but they were unable to understand the criteria for arbitration by the Social Security Bureau. They also encountered obstacles in the arbitration process. First, it is difficult for factory workers to prepare the documents required for labor arbitration which can only be completed by those with sufficient legal knowledge and document processing capabilities. Second, workers do not have a better understanding about the specific functions of each department. In some cases, workers mistakenly indicated to the staff that they needed to repay their social security in the Labor Arbitration Commission. In this case, the staff simply replied them there was no such service, instead of reminding them to visit another bureau for further inquiries.


4. Insufficient legal education and no guarantee of workers’ right to information

Workers are in lack of policy knowledge. No formal channels exist for them to learn about social insurance in the factories, but they only learn a little by word of mouth. In particular, there is low circulation regarding policies on social security repayment in the factories. Many workers had no knowledge about pension insurance when they first came to the factories, nor the procedures on dealing with pension contributions less than 15 years when they were about to retire. This is mainly because the government departments aren’t playing an active role to explain the concepts of social security to employees, nor have they forced companies to do so.


5. Difficulties in receiving a pension after successful repayment

For some workers, successful repayment does not amount to receiving a pension. Under the “4050” regulation, female workers who started to contribute to pension insurance after the age of 40 and male workers after 50 can only establish a temporary social security account. After reaching the retirement age, they can only withdraw their past contributions or transfer their accounts to the locations of their household registration to receive a lower pension. Since female workers make contributions ten years less than male ones, temporary accounts are more common among female workers. However, the reason why temporary account exists is that employers have not opened social insurance accounts for their employees. Hence, it is not the company itself, but the workers to ultimately bear the cost for the non-compliant behavior of the company.


This report puts forward the following recommendations on the implementation of the social security supplementary payment policy:


1. Service quality provided by social security agencies should be improved

The finding of the interviews shows that the services provided by social insurance agencies when dealing with the workers’ needs is insufficient. Improvement should be made as soon as possible, such as updating the service scoring system and channels for anonymous complaints. Supervision of the lower-level departments by the higher-level ones is also crucial. Those officers responsible for answering questions to the workers should receive appropriate training and pass regular assessments.


2. Labor arbitration should be based on the convenience of the workers

As mentioned above, workers need to confirm the duration of the labor relations through labor arbitration, and they also encounter difficulties in this regard. We suggest that the Social Security Bureau should specify under what circumstances labor arbitration is needed. Secondly, as most workers who pay back social security have limited education and are too old, each social security branch should have a staffer responsible for understanding the workers’ needs and helping them prepare for legal documents.


3. The “two-year limit” dispute should be resolved as soon as possible

The “two-year limit” issue has become a major obstacle for the social security payment in various parts of Guangdong Province for many years. The Bureau of Human Resources and Social Security of Guangdong Province and Shenzhen should clearly state the two-year limit does not apply to cases related to the Social Insurance Law. This is to ensure workers can enjoy their pension rights even after their retirement.


4. Flexible arrangement on the “4050 limit” should be adopted

The “4050 limit” is a regulation derived from the split management system of provincial pension funds. It intends to prevent workers from moving to places with higher pensions a few years before their retirement, which may cause instabilities in the balance of the pension fund of the places with higher amount of pension benefit.


However, for a group of workers who did not have a social security account in their early years, this kind of regulation is unfair to them. Employer’s failure to establish a social security account infringes on their rights, and workers will then have to bear the cost of not being able to receive a local pension. There should be policies for them not to be affected by the “4050 limit” and allow them to retire locally after their payment.


5. Mandatory collection of arrears from enterprises should be enforced

In the early years, due to the poor supervision of local governments and the lack of social security payment by the corporates, many workers were unable to receive local pensions. We believe this is an infringement of the workers’ rights which the enterprises and local governments are responsible for. The losses caused by the infringement should be compensated by the enterprises and the government. Social security agencies should take the initiative to collect arrears from those companies.


6. Education regarding social security rights inside and outside the enterprises should be strengthened

Government departments should compulsorily provide training on social security knowledge within enterprises. Also, social security knowledge and workers’ rights should be guaranteed and also broadcasted to the mass media and social media.



The End