China’s new Social Security Law, which went into effect on 1 July 2011, stipulates that uninsured workers who suffer a work-related injury can apply to a local government Work-related Injury Fund for an advance payment if their employer refuses to pay compensation.
However, an investigation by a legal-aid centre in Beijing shows that one year after the implementation of the Social Security Law, the vast majority of municipal governments are refusing to set up an advance payments system.
Of the 287 cities surveyed by the Beijing Yilian Legal Aid and Research Centre, 190 (about 77 percent) said they definitely would not accept applications for advance payment and about 13 percent said they were unclear about the provisions. Only 28 cities (10 percent) said they definitely would accept applications, and of these 28, only nine have so far issued detailed implementing regulations. Two of the cities surveyed, Ningbo and Zibo, had already paid out 99,200 yuan and 55,860 yuan respectively to injured workers.
Furthermore, the survey revealed that 78.6 percent of the injured workers interviewed had not even heard of the Social Security Law and 91.8 percent of them were unaware of the work-related injury advance payment system. The vast majority of local governments had not made any attempt to publicise the new system and only 13.7 percent of them had a link to the provisions on their official website.
Two of the main reasons given by local government officials for not implementing the system were that the injured party had not applied for insurance and that if the employer disappeared then there would be no way to recover the funds. In reality, local governments simply do not want the additional burden on finances and human resources that they fear the system would entail.