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Tuesday 24 February 2009
Wage defaults for fourth quarter hit 30 million yuan in Shenzhen
Defaults by Pearl River Delta firms on paying workers’ wages increased sharply in the fourth quarter of last year as the global financial meltdown began to bite, according to mainland media.
Wage defaults for fourth quarter hit 30 million yuan in Shenzhen
Kelly Chan 24 February 2009
Defaults by Pearl River Delta firms on paying workers’ wages increased sharply in the fourth quarter of last year as the global financial meltdown began to bite, according to mainland media.
Xinhua reported yesterday that Shenzhen authorities had recorded 48 cases of company bosses absconding without paying wages, involving a total of 30 million yuan (HK$34.07 million), in the last three months of last year.
Shenzhen police said that by the end of last year, 370 firms had defaulted on paying 102 million yuan in wages to 39,200 workers.
The figures were a sharp increase on the previous year, with tough economic times affecting bigger firms such as Hong Kong-listed appliance maker BEP and Shenzhen-based Italian sofa manufacturer DeCoro.
Companies increasingly fell behind on their wage payments as orders declined and bank loans dried up.
Wage disputes are widely feared as sparks that could ignite social unrest, especially in Shenzhen, where the Guangzhou Daily said there were at least 5.6 million migrant workers last November. But Shenzhen authorities had put measures in place to guarantee workers would get paid, Xinhua said. The city’s Labour and Social Security Bureau had begun monitoring firms with operational problems that were a month behind in paying workers.
Shenzhen had also ordered companies to put money into an insolvency fund that the government could use to pay workers if firms fold.
Baoan District Labour Bureau has demanded firms submit detailed payroll records online and pay wages through banks, which notify the bureau two days after funds are transferred. The bureau can then compare the two sets of records to check whether firms have paid workers properly.
Shenzhen has maintained a blacklist since November to punish firms that do not pay employees, or delay payments.
Once blacklisted, companies cannot qualify for government projects. They also face a five-year ban on access to preferential policies, and their legal representative will not be able to register a new company in Shenzhen. In February, 2,000 unpaid DeCoro employees blocked traffic in protest after the firm shut down without notice. They did not leave until the labour bureau had paid more than 10 million yuan in unpaid wages.
It was a reprise of a similar incident in 2007 when printing company staff blocked a Baoan highway for an hour because their company had not paid them.
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Wage defaults for fourth quarter hit 30 million yuan in Shenzhen
Kelly Chan
24 February 2009
Defaults by Pearl River Delta firms on paying workers’ wages increased sharply in the fourth quarter of last year as the global financial meltdown began to bite, according to mainland media.
Xinhua reported yesterday that Shenzhen authorities had recorded 48 cases of company bosses absconding without paying wages, involving a total of 30 million yuan (HK$34.07 million), in the last three months of last year.
Shenzhen police said that by the end of last year, 370 firms had defaulted on paying 102 million yuan in wages to 39,200 workers.
The figures were a sharp increase on the previous year, with tough economic times affecting bigger firms such as Hong Kong-listed appliance maker BEP and Shenzhen-based Italian sofa manufacturer DeCoro.
Companies increasingly fell behind on their wage payments as orders declined and bank loans dried up.
Wage disputes are widely feared as sparks that could ignite social unrest, especially in Shenzhen, where the Guangzhou Daily said there were at least 5.6 million migrant workers last November. But Shenzhen authorities had put measures in place to guarantee workers would get paid, Xinhua said. The city’s Labour and Social Security Bureau had begun monitoring firms with operational problems that were a month behind in paying workers.
Shenzhen had also ordered companies to put money into an insolvency fund that the government could use to pay workers if firms fold.
Baoan District Labour Bureau has demanded firms submit detailed payroll records online and pay wages through banks, which notify the bureau two days after funds are transferred. The bureau can then compare the two sets of records to check whether firms have paid workers properly.
Shenzhen has maintained a blacklist since November to punish firms that do not pay employees, or delay payments.
Once blacklisted, companies cannot qualify for government projects. They also face a five-year ban on access to preferential policies, and their legal representative will not be able to register a new company in Shenzhen. In February, 2,000 unpaid DeCoro employees blocked traffic in protest after the firm shut down without notice. They did not leave until the labour bureau had paid more than 10 million yuan in unpaid wages.
It was a reprise of a similar incident in 2007 when printing company staff blocked a Baoan highway for an hour because their company had not paid them.
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