The Ministry of Human Resources and Social Security on 16 October 2018 released for public comment the Draft Regulations for Managing a Blacklist for Serious Social Insurance Violations.
The draft instructs local social insurance centres to place any entity or individual that seriously violates social insurance laws on a blacklist. The blacklist will be shared on local and national credit information platforms, and will be made available to all government authorities.
Blacklisted companies and individuals face restrictions in “government purchasing, transportation, bidding, manufacturing approvals, licence reviews, financing and loan applications, market access, tax benefits, rewards, etc.”
Serious violations that could land a company or individual on the blacklist include: failing to rectify unpaid social insurance contributions as requested by the authorities; making false declarations or submitting falsified documents to participate in the social insurance scheme; defrauding the labour authorities for social insurance benefits; and failing to repay to the social insurance fund any work injury benefits paid on behalf of the employer, its legal representative or a third party.
The maximum period for a company or individual to remain on the blacklist normally will not exceed five years. For first-time offenders, the initial blacklist period will be one year. If the offender fails to rectify the violation or commits a new social insurance violation during the first year, the blacklist period will be extended to two years.
If the offender commits a new social insurance violation after being removed from the blacklist, the new blacklist period will start at two years. In certain circumstances, a blacklisted company or individual can be removed early from the blacklist if the offender rectifies the non-compliance as requested by the authorities, and provides a written commitment to guarantee future compliance.