Consequences of enterprises not paying social security

Failure to pay social security has serious consequences, including legal liability, damage to employees' rights and interests, damage to corporate image, and influence on the stable development of enterprises.

I. Legal liability

Enterprises that fail to pay social security violate the provisions of national laws and regulations and will be punished by law. Specifically, if an enterprise fails to pay social insurance premiums in full and on time, it will be ordered to pay or make up within a time limit, and a 0.5% late fee will be charged on a daily basis from the date of default; Failing to pay within the time limit, the relevant administrative departments shall impose a fine of more than one time and less than three times the amount owed. In addition, enterprises may also face serious consequences such as administrative punishment and credit punishment.

Second, the rights and interests of employees are damaged.

Enterprises do not pay social security, which directly damages the legitimate rights and interests of employees. Social security is the basic guarantee for employees in pension, medical care, unemployment, work injury and maternity. If enterprises fail to pay social security, employees will not get due protection when facing these risks. At the same time, when employees leave or retire, they may not enjoy the benefits they deserve because the company has not paid social security, resulting in economic losses.

Third, the corporate image is damaged.

Failure to pay social security not only violates the law, but also damages the image and reputation of the enterprise. In the fierce market competition, the reputation and image of an enterprise is an important factor to attract talents and win the trust of customers. Failure to pay social security will make employees and the outside world distrust it and reduce the competitiveness of enterprises.

Fourth, it affects the stable development of enterprises.

Failure to pay social security for a long time may lead to confusion in internal management of enterprises, increase employee turnover rate, and thus affect the stable development of enterprises. At the same time, in the face of legal disputes or employees' rights protection, enterprises may be at a disadvantage because they have not paid social security, which will increase their business risks.

To sum up:

Failure to pay social security has serious consequences, including legal liability, damage to employees' rights and interests, damage to corporate image, and influence on the stable development of enterprises. Therefore, enterprises should strictly abide by national laws and regulations, pay social insurance premiums in full and on time, protect the legitimate rights and interests of employees, safeguard the corporate image and reputation, and promote the stable development of enterprises.

Legal basis:

People's Republic of China (PRC) social insurance law

Article 63 provides that:

If the employer fails to pay social insurance premiums in full and on time, the social insurance premium collection agency shall order it to pay or make up within a time limit.

If the employer fails to pay or repay the social insurance premium within the time limit, the social insurance premium collection agency may inquire about its deposit account in banks and other financial institutions; And can apply to the relevant administrative departments at or above the county level to make a decision on the allocation of social insurance premiums, and notify their bank or other financial institutions in writing to allocate social insurance premiums. If the balance of the employer's account is less than the social insurance premium that should be paid, the social insurance premium collection agency may require the employer to provide guarantee and sign a deferred payment agreement.

If the employer fails to pay the social insurance premium in full and fails to provide guarantee, the social insurance premium collection agency may apply to the people's court for sealing up, distraining and auctioning the property whose value is equivalent to the social insurance premium that should be paid, so as to offset the social insurance premium with the proceeds from the auction.

People's Republic of China (PRC) labor contract law

Article 38 provides that:

Under any of the following circumstances, the employee may terminate the labor contract:

(1) Failing to provide labor protection or working conditions as agreed in the labor contract;

(2) Failing to pay labor remuneration in full and on time;

(3) Failing to pay social insurance premiums for laborers according to law;

Labor law of the people's Republic of China

Article 72 provides that:

The social insurance fund shall determine the source of funds according to the types of insurance and gradually implement social pooling. Employers and workers must participate in social insurance and pay social insurance premiums according to law.