Is it illegal for small companies not to pay social security?

Illegal. Social security is both a right and an obligation. It is illegal not to pay social security for employees for any reason. The employing unit shall, within 30 days from the date of employment, apply to the social insurance agency for social insurance registration for its employees. If the employee fails to register for social insurance, he may ask the employer to compensate for the losses, and the social insurance agency shall verify the social insurance premium he should pay. Failure to pay social security has the following consequences: the social security agency shall order it to pay within a time limit or make up for it, and from the date of default, it shall add a late payment fee of five ten thousandths per day; Failing to pay within the time limit, the relevant administrative departments shall impose a fine of one to three times the amount owed.