Regulations on Unemployment Insurance for Staff and Workers of State-owned Enterprises - 1993

(the State Council by Decree No. 110 on December 4, 1993)

Chapter I General Provisions

Article 1.

These Regulations are formulated in order to improve the labor system of State-owned enterprises, guarantee a minimum standard of living for the staff and workers waiting for employment, and maintain social stability.

Article 2.

The "staff and workers waiting for employment" referred to in these Regulations shall be the staff and workers of the State-owned enterprises (hereinafter referred to as the "Enterprises"), who fit the following criteria:

(1) Staff and workers of the Enterprises which have legally declared bankruptcy;

(2) Staff and workers of the Enterprises facing bankruptcy laid off during the statutory streamlining period;

(3) Staff and workers of the Enterprises closed or dissolved in accordance with relevant regulations of the State;

(4) Staff and workers laid off in periods during which the Enterprises ceased production in order to be streamlined in accordance with relevant regulations of the State;

(5) Staff and workers who have terminated or canceled their labor contracts;

(6) Staff and workers who have been dismissed or fired by the Enterprises; or

(7) Other staff and workers entitled to unemployment insurance in accordance with the laws and regulations or the regulations of the people's governments of the provinces, autonomous regions and municipalities directly under the Central Government.

Article 3.

Unemployment insurance shall be closely incorporated with such employment services as vocational introductions, employment training and self-reliance, and shall be organized in an overall plan.

Chapter II Raising and Management of the Unemployment Insurance Fund

Article 4.

The resources of the unemployment insurance funds shall come from the following sources:

(1) Unemployment insurance premiums paid by the Enterprises;

(2) The proceeds of the interest accrued by the unemployment insurance premiums; and

(3) Financial subsidies.

Article 5.

The Enterprises shall pay unemployment insurance premiums on the basis of 0.6% of the payroll of all staff and workers. Where unemployment insurance funds are insufficient, or where there is a cash surplus in such unemployment insurance funds, upon the approval by the people's governments of the provinces, autonomous regions and municipalities directly under the Central Government, such premiums paid by the Enterprises shall be reasonably increased or reduced. However, the maximum amount of such premiums shall not exceed 1% of the payroll of all staff and workers of the respective Enterprises.

Unemployment insurance premiums shall be paid before the Enterprises pay their income taxes, and shall be withheld on a monthly basis by the banks in which the Enterprises open their accounts.

Article 6.

Unemployment insurance premiums paid by the Enterprises shall be transferred into "unemployment insurance fund special accounts" opened in banks by insurance institutions in the locales of the Enterprises, deposited into banks as special deposits, and spent for authorized purposes only. No institutions, units or individuals shall be allowed to embezzle these funds.

After unemployment insurance funds are deposited into banks, their interest shall be calculated in accordance with the interest rate of urban and rural residents' deposits. The proceeds of the interest shall be transferred into unemployment insurance funds.

Article 7.

Unemployment insurance funds shall be organized in an overall manner at the city and county level. The provinces or autonomous regions may focus part of the unemployment insurance fund to be regulated for use while the municipalities directly under the Central Government may, in light of need, use all or part of the unemployment insurance funds in an overall plan.

Article 8.

The competent labor administrative institutions shall, in accordance with the scope of the overall plan, be responsible for preparing the budget and final settlement of the proceeds of unemployment insurance funds and their management fees, which shall, upon the examination, verification and compilation by the competent financial administrative institutions at the same level, be incorporated into the budget and final settlement at the corresponding level and then submitted to the people's government at the corresponding level for examination and approval, and shall not be used for balancing financial revenues and expenditures.

The competent financial administrative institutions and the auditing institutions shall increase supervision of the proceeds of unemployment insurance funds and their management fees.

Article 9.

No taxes or expenses shall be levied on unemployment insurance funds or their management fees.

Chapter III Use of the Unemployment Insurance Fund

Article 10.

The expenditure items of the unemployment insurance fund are as follows:

(1) Unemployment relief funds for staff and workers waiting for employment;

(2) Medical care expenses, allowances for funeral expenses, pensions and relief funds for the immediate relatives of the staff and workers waiting for employment in period during which they receive unemployment relief funds;

(3) Vocational training expenses necessary to job changes;

(4) The expenses provided for the self-help through production of the workers waiting for employment;

(5) Unemployment management fees; and

(6) Other expenses necessarily paid for the purpose of maintaining a minimum standard of living for the staff and workers waiting for employment and of helping them to be re-employed upon the approval of the people's governments of the provinces, autonomous regions and municipalities directly under the Central Government.

Article 11.

The staff and workers waiting for employment who meet the stipulation of Article 2 of these Regulations shall receive unemployment relief fund, but only after they handle the unemployment registration at their local unemployment insurance institution.

Article 12.

The term during which staff and workers waiting for employment may receive unemployment relief funds shall be determined in accordance with the duration of their consecutive work in the Enterprises before their unemployment.

(1) For staff and workers waiting for employment who had consecutively worked in an Enterprise for more than one (1) year but less than five (5) years before their unemployment, the maximum term during which they may receive unemployment relief funds shall be twelve (12) months.

(2) For staff and workers waiting for employment who had consecutively worked in the Enterprises for more than five (5) years before their unemployment, the maximum term during which they may receive unemployment relief funds shall be twenty-four (24) months.

Article 13.

Unemployment relief funds shall be paid to the staff and workers waiting for employment each month by the unemployment insurance institutions.

The distribution standard of unemployment relief funds shall be equal to 120% to 150% of the amount of social relief funds stipulated by the local institutions of civil affairs. The people's government of the province, autonomous region or municipality directly under the Central Government shall determine the specific amount.

Article 14.

The distribution standards of medical care expenses for the staff and workers waiting for employment shall be determined by the people's government of the province, autonomous region or municipality directly under the Central Government.

Allowances for the funeral expenses for the staff and workers waiting for employment and the pensions and relief fund for their immediate relatives shall be paid in light of relevant regulations regarding the local social insurance for the staff and workers.

Article 15.

Vocational training expenses for job change and the expenses for self-help through production of the staff and workers waiting for employment shall be drawn at a due proportion with respect to the raising of the unemployment insurance fund of the last fiscal year. The people's government of the province, autonomous region or municipality directly under the Central Government shall determine the specific proportion drawn and the method of use.

Article 16.

The unemployment insurance institutions shall cease payment of unemployment relief funds and other expenses for staff and workers waiting for employment in any of the following circumstances:

(1) The end of the term for them to receive unemployment relief funds has been reached;

(2) They join the Army or go abroad for settlement;

(3) They are re-employed;

(4) They refuse employment introduced by the labor employment service agencies twice without viable reason; or

(5) They are sentenced to reform through labor or to imprisonment during the term of receiving unemployment relief funds.

Chapter IV Functions and Duties of the Organizational Management Institutions

Article 17.

The competent labor administrative institutions under the State Council shall be responsible for the management of unemployment insurance for the staff and workers waiting for employment from Enterprises throughout the entire nation.

The competent labor administrative institutions of the people's governments above the county level shall be responsible for the management of unemployment insurance for the staff and workers waiting for employment from Enterprises within their administrative jurisdictions. They shall also be responsible for the overall plan and organization of implementation unemployment insurance, job introductions, vocational training, and self-help production of the staff and workers waiting for employment. They shall guide the unemployment insurance institutions to work hard at raising, managing and distributing unemployment insurance funds, as well as at the organization and management of the staff and workers waiting for employment.

The unemployment insurance fund committees established by the people's governments above the county level shall carry out guidance and supervision of the management of unemployment insurance funds. The chair of such committee shall be held by the leading official of the people's government at the corresponding level. Representative officials from such institutions as the labor, finance, (economic) planning, auditing and banks, as well as the representative official of the trade union at the corresponding level, shall participate in such committee. The office of the committee shall be set up in the competent labor administrative institution.

Article 18.

The local unemployment insurance institutions shall be the non-profit institutions which shall specifically conduct the business relevant to unemployment insurance.

The composition of personnel at the unemployment insurance institutions shall be determined by the people's government of the province, autonomous region or municipality directly under the Central Government with regard to actual need.

The expenditures of the unemployment insurance institutions shall be paid out of the unemployment insurance management fees. The competent labor administrative institutions of the people's government of the province, autonomous region and municipality directly under the Central Government shall propose the expenditure standards for the unemployment insurance management fees upon the examination and verification of the competent financial administrative institutions at the same level, per the approval of people's government at the corresponding level.

Chapter V Punishment

Article 19.

In cases where unemployment relief funds and other unemployment insurance fees were obtained by illegal means, all illegal proceeds shall be recovered by unemployment insurance institutions. If a crime has been committed, criminal liability shall be investigated according to law.

Article 20.

In cases where any unit or individual embezzles unemployment insurance funds, administrative punishment shall be imposed upon the personnel in charge and the personnel directly held responsible in accordance with the seriousness of the cases. If a crime has been committed, criminal liability shall be investigated according to law.

Article 21.

In cases where unemployment insurance institutions are in violation of the regulations relevant to the deferment of payment of unemployment relief funds and other unemployment insurance fees, the competent labor administrative institutions shall be ordered to make the necessary corrections. If the circumstances are serious, administrative punishment shall be imposed upon the personnel in charge and the personnel directly responsible.

Chapter VI Supplementary Provisions

Article 22.

Unemployment insurance of the staff and workers waiting for employment from the institutions practicing enterprise management shall be implemented in accordance with the provisions of these Regulations. The unemployment insurance premium of the institutions shall be paid out of locally controlled funds.

Article 23.

These Regulations shall not apply to the contracted workers who are recruited from rural areas by the Enterprises.

Article 24.

The people's government of the province, autonomous region and municipality directly under the Central Government shall, in light of the provisions of these Regulations, formulate the measures for implementation.

Article 25.

These Regulations shall be interpreted by the competent labor administrative institution under the State Council.

Article 26.

These Regulations shall be implemented as of May 1, 1993. The "Interim Regulations on Unemployment Insurance for Staff and Workers of the State-owned Enterprises" issued by the State Council on July 12, 1986 shall, at the same time, become void.