How businesses can respond to reforms in social security policy

How can enterprises respond positively?

Social security norms are the general trend, enterprises in the upcoming new policy of social security, should be frankly faced, more from the strategic development of the enterprise to consider, from their own internal practical needs to start, to consider changing the personnel structure, salary structure, employment mode, personnel liberalization, personnel mechanization and so on.

At the same time, the state also sent a message, in the State Council executive meeting held on September 18, Premier Li Keqiang made a clear answer: strictly prohibit their own historical arrears of enterprises to centralized clearing. Before the reform of the social security collection agency in place, all localities will keep the existing social security policy unchanged. At the same time, we are urgently studying the program to reduce the rate of social security fees.

At the end of September, the Department of Human Resources and Social Security issued the "Emergency Notice on Implementing the Spirit of the State Council's Executive Meeting to Effectively Stabilize the Collection of Social Security Premiums" Human Resources and Social Security Office Letter [2018] No. 246 put forward a number of requirements on the stabilization of social security premiums collection:

I. Fully understand the significance of the stabilization of social security premiums collection work.

II. Strictly implement all existing social security fee collection policies.

Three, it is strictly prohibited to self-organize the enterprise historical arrears of centralized payment.

Four, actively do a good job in the collection system reform related preparatory work.

V. Strengthen supervision and inspection to ensure that the requirements of the Party Central Committee and the State Council are put in place.

On the morning of September 27, the Premier inspected the comprehensive service hall of the China (Zhejiang) Pilot Free Trade Zone and re-emphasized: "Firstly, it is strictly forbidden to concentrate on clearing the payment on your own; secondly, the relevant departments are studying the further reduction of social security fee rates. The general principle is just one: overall not to increase the burden on enterprises."

From the national level, considering the current economic situation in China, the future in general will not increase the burden on enterprises,

Considering the possibility of social security fee rate reduction, some compliant enterprises may also profit from this, but for some enterprises, a certain degree of cost increase is unavoidable.

One solution that is getting a lot of attention is to change the traditional employment model. Under the traditional employment model, a company hires and pays its employees, and according to existing social security policies, the company pays a percentage of the wages it receives. If the employees of a company register a labor company together, the employees will become partners of the labor company. The enterprise pays the service fee to the labor company, and the employment relationship becomes a contractual relationship. The labor company gets the service fee and pays the partners through dividends, and the salary is converted into dividends. Finally, the partners decide on their own whether or not to pay social security after receiving the dividends.

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