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Since 1998, Party committees and governments at all levels have, in line with the plans and requirements of the CPC Central Committee and the State Council, been firmly implementing such policies as encouraging mergers and acquisitions, standardizing bankruptcies, downsizing staffs to improve efficiency, executing the Reemployment Project and establishing the Three Social Security Systems ¨C the system of ensuring basic living expenses for laid-off workers of the state-owned enterprises, the system of unemployment insurance benefits, and the system of subsistence allowances for urban residents. These efforts have guaranteed basic living conditions for the overwhelming majority of the laid-off workers and helped a large number of them to realize reemployment by diverse means. Facts prove that these policies are absolutely correct and shall continue to be implemented in an all-round way. The employment situation in our country is very serious and will remain so in a relatively long time to come. The major contradiction in regard to our country's employment is the one between the laborers' demand for full employment and their outnumbered supply and incompetent quality. At present, the contradiction manifests itself in such manners as: the concurrent existence of the conflict between the aggregate supply of and the aggregate demand for laborers, and the conflict within the employment structure; growing employment pressure in urban areas as well as increasing speed of the surplus rural laborers moving to non-agricultural sectors; and the intertwined problems of employment of new laborers and reemployment of laid-off workers. We shall place our focus on the reemployment of laid-off workers, which has become a serious economic and social issue exerting impact of overall significance. We shall take effective measures to strengthen the employment work, especially the reemployment work for laid-off workers, so as to ensure social stability and to lay a better foundation for deepening reform and promoting development. The relevant matters are hereby notified as follows: I. UNIFYING THE THOUGHTS, STRENGTHENING THE LEADERSHIP AND DEFINING THE OBJECTIVE OF, AND THE RESPONSIBILITY FOR, THE REEMPLOYMENT WORK (1) Party committees, governments and relevant departments at all levels shall be fully aware of the extreme importance of the employment and reemployment work. We shall, proceeding from the height of maintaining the overall situation of reform, development and stability and realizing long-time peace and stability, perceive the employment and reemployment work as a long-term strategic mission and a great political task, and as an important step for fulfilling the requirements of the "Three Represents" in an all-round way. We shall focus on the present while keep the future in view, take all things into consideration and make unremitting efforts in fulfilling this work. We shall promote employment and reemployment by means of development and reform, appropriately handle relationships between economic development, economic restructuring, deepening of the reform, balanced growth of urban and rural economies, improvement of the social security system and expansion of employment, and step by step, blaze a trail on which employment can be fully enhanced and the sustained, rapid and sound growth of economy can be guaranteed. We shall persist in market-oriented employment mechanism, implement pro-active employment policies, create jobs through diverse channels, improve the employment environment, facilitate laborers seeking jobs on their own or exercising self-employment, encourage enterprises to absorb more laborers, and assist needy groups in their search for jobs. At present and for some time to come, we shall consolidate the "Two Guarantees" and focus the reemployment work on those laid-off workers showing both ability and desire to work. (2) Party committees and governments at all levels shall be primarily responsible for the employment work in their respective localities. Control over the unemployment rate and creation of more jobs shall be incorporated into the national economic and social development plans as an important indicator of the macro-control policies. Such objectives as net increase of jobs, performance of the reemployment policies, consolidation of reemployment services, increases of input in reemployment and assistance in the employment of needy groups shall be defined, decomposed layer by layer, supervised in the course of their fulfillment and inspected regularly as an important element in the appraisal of an official's administrative achievements. Those doing a good job in fulfilling the objectives will be given credit, while those failing to show good performance will be reprimanded. Shall serious consequences be caused due to absence of effective work, the leader shall be subject to legal liabilities. Departments of labor and social security, planning, economy and trade, education, civil affairs, finance, construction, taxation, industry and commerce, banking, pricing, etc., shall perform their functions and duties and strengthen coordination and support. The role of people's organizations such as the democratic parties, federations of industry and commerce, trade unions, the Communist Youth League of China, the All-China Women's Federation shall be brought into full play. We shall pool the wisdom and efforts of everyone and work together to strengthen the employment work and the reemployment work in particular. (3) We shall give full play to the function of the Party's grassroots organizations and the ideological and political work in promoting employment and reemployment. In carrying out the work on enterprises' transformation and regrouping, shutdown and bankruptcy, downsizing and reemployment, the Party's grassroots organizations shall consider as a major task ensuring the people's basic living conditions, expanding employment and maintaining social security. The whole society shall be mobilized to care for and support the employment work, especially the reemployment work for laid-off workers. We shall give full play to the Party's edge in ideological and political work and publicize relevant policies of the Party and the government. We shall utilize typical examples of reemployment to help laid-off workers understand and support enterprise reforms, transform their ideas, strive to become self-reliant, maintain social security conscientiously and, with the support of state policies and the assistance of society, realize reemployment through their own efforts. II. OPENING UP MORE CHANNELS FOR EMPLOYMENT AND CREATE JOBS IN EVERY POSSIBLE WAY (4) We shall hold on to the policy of expanding domestic demand, keep the national economy growing on a fast track as is necessary, actively restructure the economy and spare no efforts in creating jobs. When formulating economic and social policies of overall significance and deciding upon construction projects, we shall give adequate consideration to the job creation besides our emphasis on the enhancement of competitiveness. We shall actively develop labor-intensive industries and enterprises with comparable advantages, thus increasing the capacity of economic growth to stimulate employment. (5) We shall develop more channels for employment and reemployment. We shall vigorously promote the tertiary industries, broaden the employment channels in sectors of traditional services such as trade and catering, and develop tourism industries so as to create more jobs. Particularly, job opportunities in the community service industries shall be tapped, and focus be given to the creation of jobs oriented towards community living services, logistic support for state organs, enterprises and public institutions and public administration of communities, as well as jobs of public benefits such as sanitation, afforestation, community peace-keeping and public facilities maintenance. We shall encourage the development of diversified-ownership economies, for example, the private and individual sectors, foreign-funded enterprises and equity joint ventures, so as to create more jobs. The development of labor-intensive medium and small enterprises with market demand shall be advanced, and employment service enterprises shall keep on growing to attract more laid-off workers. Trans-regional labor cooperation and labor export shall be accelerated. We shall encourage regions under heavy pressures of employment, especially resources exploitation-based cities and isolated industrial & mining areas, to develop continuation industries and organize laid-off workers to work in regions with extra demand for laborers or in rural areas to undertake the contract for barren hills and wasteland, or engage in plantation or animal husbandry. Eligible large and medium-sized enterprises shall, when conducting restructuring and transformation and separating their principal business from their side-line business, be encouraged to resettle the redundant personnel by utilizing their non-core and idle assets and through diverse means; in the case of bankrupt enterprises, efficient assets shall be made use of to resettle employees. Laid-off workers shall be encouraged to realize employment in such flexible and diverse manners as part-time, temporary, seasonal and elastic, etc. We shall provide services and assistance to their flexible employment through developing such organizational forms as the labor dispatching and employment bases. III. IMPROVING AND CARRYING OUT THE SUPPORT POLICIES ON REEMPLOYMENT PROMOTION (6) The reemployment support policies are targeted to the following persons who has both ability and desire to work (hereinafter referred to as laid-off workers): a. laid-off employees of the state-owned enterprises; b. unemployed persons of the state-owned enterprises; c. persons of the bankrupt and closed state-owned enterprises who are awaiting resettleing; and d. other urban residents who enjoy minimum subsistence allowances and have been unemployed for more than a year. (7) We shall encourage laid-off workers to seek jobs on their own or be self-employed. a. For those laid-off workers engaged in individual operations (excluding the industries restricted by the state), their business taxes, urban maintenance and construction taxes, educational surtaxes and income taxes will be subject to exemption within three years, and all administrative and institutional charges falling into the categories of administration, registration and certification will be exempted. Relevant departments under the State Council and the people's governments at the provincial level shall define and make public the exemption items. Any sort of unauthorized pooling of funds, compulsory donations or random levies on enterprises shall be prohibited. For various kinds of servicing charges involving the engagement of laid-off workers in individual operations, the minimum standards shall be applied. No compulsory services or charges are allowed. b. Provinces, autonomous regions, municipalities directly under the Central Government and cities at or above the prefecture level shall establish the credit guarantee fund for laid-off workers. The capital needed shall be raised chiefly through the treasury at the same level, and guarantee agencies determined by the local government. Small loans shall be provided to laid-off workers for seeking jobs or establishing business on their own, and conducted in accordance with the procedures featuring voluntary application by the person, recommendation by the community, examination by the labor and social security servicing institution, guaranty by the guarantee agency and verification by the commercial bank. The amount of a loan shall be controlled at around 20,000 RMB Yuan. The duration of a loan shall not exceed two years; extension may be applied for once if needed. The interest to the loan shall be determined according to the interest rate issued by the People's Bank of China; for loans involved in projects of moderate profit, the interest will, based on facts, be subsidized in full amount by the state treasury, but interest incurred in the extension period will not be subsidized. The guaranteed amount shall not exceed five times as much as the guarantee fund, with the duration identical to that of a loan. All state-owned commercial banks, joint-stock commercial banks, city commercial banks and qualified urban credit cooperatives shall launch this loan operation, simplify the procedures and facilitate account opening and settlement. Where laid-off workers conduct partnership operations or organize themselves for employment, the size of the loan may increase based on the number of people and the operational projects. c. Governments and relevant departments at all levels shall transform their functions, reform the process of administrative examination and approval, simplify the procedures for laid-off worker's business establishment and improve their service efficiency. If needed, eligible places shall set up special windows with the participation of relevant administrative examination and approval organs, to provide services in a connected sequence. d. Governments at all levels shall, when conducting urban planning and constructions and rectifying the city appearance, plan as a whole and settle properly the issue of business sites for laid-off workers' job-seeking and self-employment. Eligible places may arrange relatively concentrated breeding sites for production and business. e. For laid-off workers who get employed through such flexible means as being part-time, temporary and elastic, efforts shall be intensified to formulate coordinated methods in aspects of labor relation forms, wage payment, social insurance etc, in light of the features of their employment, so as to safeguard their lawful rights and interests. (8) We shall encourage service enterprises to attract laid-off workers. a. For an existing service enterprise (excluding the industries restricted by the state) creating new positions, if its newly recruited laid-off workers at the same year account for more than 30% of the total number of its employees and the duration of such labor contracts is more than three years, the enterprise income tax will be reduced within three years to a certain ratio of its annual income tax payable according to the number of its recruited employees, with recognition by the labor and social security department and verification by the taxation authority. b. For a newly established service enterprise (excluding the industries restricted by the state), if its newly recruited laid-off workers at the same year account for more than 30% of the total number of its employees and the duration of such labor contracts is more than three years, its business tax, urban maintenance and construction tax, educational fee surcharge and enterprise income tax payable will be exempted within three years, with recognition by the labor and social security department and verification by the taxation authority; if its newly recruited laid-off workers at the same year account for less than 30% , its enterprise income tax will be reduced to a certain ratio of its annual enterprise income tax payable according to the number of its recruited employees. c. For a service enterprise of any kind (including commercial, trade, catering and service enterprises and excluding the industries restricted by the state), if it recruits laid-off workers of the state-owned enterprises to fill in the new positions and signs such labor contracts with the duration of more than three years, three years of social insurance subsidies will be provided from the reemployment fund on the basis of the number of its recruited employees, with examination and approval by the labor and social security department. The subsidy criteria for enterprises shall be calculated according to the aggregate premiums of old-age insurance and unemployment insurance of the recruited employees, but old-age insurance and unemployment insurance premiums payable by person will be subject to personal expenses. (9) When a state-owned enterprise of large and medium size establishes economic entities (excluding the industries restricted by the state) to resettle the redundant personnel by separating its principal business from its side-line business and transforming the side-line business, if the following conditions are met upon recognition by relevant departments and examination by the taxation authority, its enterprise income tax will be exempted within three years: a. utilizing non-core assets and idle asset of the former enterprise, or efficient assets of the closed or bankrupt enterprise; b. conducting independent accounting, having clearly defined property rights, and realizing the pluralistic ownership of property rights; c. absorbing more than 30% of the redundant personnel of the former enterprise; d. altering or signing new labor contracts with the resettleed employees. (10) It is decided on a temporary basis that the aforesaid policies concerning the social insurance subsidies and the reductions or exemptions of taxes and fees shall be implemented until the end of the year 2005. (11) A higher threshold for collecting business tax and value-added tax will be put forward. The specific measures in this regard shall be formulated by the Ministry of Finance and the State Administration of Taxation. (12) Governments at all levels shall take as the major subjects of reemployment assistance (hereinafter referred to as above-age subjects with employment difficulties) those laid-off workers (male: over 50 years old; female: over 40 years old) who have both ability and desire to work but face difficulties in getting employed, and provide diversified assistance such as the real-time job assistance. Positions of public benefits funded and developed by the government shall fit into the priority to resettle the above-age subjects with employment difficulties. Where the positions of public benefits developed by a community are arranged to resettle the above-age subjects with employment difficulties, subsidies for social insurance will be provided from the reemployment fund. The subsidy criteria for enterprises shall be calculated on the basis of the aggregate premiums of old-age insurance and unemployment insurance of the employees recruited by the entity, but the old-age insurance and the unemployment insurance premiums payable by person will be subject to personal expenses. Meanwhile, various localities may provide job subsidies in a certain ratio, with the subsidy criteria determined by the local government and the fund raised through the local treasury. (13) Governments at all levels shall adjust their financial spending structures, increase the input into reemployment fund, and list into financial budget the reemployment promotion fund. The title of employment subsidies shall be added into the Government Budget Revenues and Expenditures Titles to reflect expenditures of the financial departments at various levels on the items of social security subsidies, position subsidies, small loan guarantees and interest subsidies, reemployment training subsidies, employment service subsidies, and so on. In addition, financial departments at various levels shall arrange funds for the community labor and social security work expenses and the labor market information network constructions. Financial departments at any level shall not reduce the scale of the subsistence allowances fund arranged for the laid-off workers of state-owned enterprises; on the premise that the subsistence allowances for the laid-off workers are ensured, arrangement may, according to the need of the locality's work, be made to use part of the fund to promote reemployment. For the central and western regions and the old industrial bases, the state treasury will, under the item of special transfer payment fund for the guarantee of subsistence allowances for laid-off workers of state-owned enterprises, increase the reemployment subsidy fund to support the local reemployment promotion work. No misappropriation is allowed. The reemployment fund increase by the state treasury will be mainly used to cover: (1) full amount of interest subsidy for small loans; (2) partial amount of social insurance subsidies; and (3) partial amount of employment service and reemployment training subsidies. (14) Party committees and governments at all levels shall take effective measures and do a good job in performing the reemployment support policies. It is imperative to organize the departments of social security, supervision, planning, economy and trade, public security, finance, construction, culture, sanitation, taxation, industry and commerce, banking, pricing, and so on and trade unions to conduct special checks on the performance of the reemployment policies on a yearly basis, and give full play to the social supervision and the masses supervision so as to make the reemployment support policies within the reach of grassroots entities and laid-off workers. (15) All localities shall strictly define the scope of subjects of the support policies. Departments of labor and social security at all levels shall be responsible for issuing to the qualified persons and verifying, without charging, the reemployment preferential treatment certificates, which are used as the certification for enjoying the support policies. We shall rely on the efforts of neighborhoods and enterprises to examine and recognize the laid-off workers, and rigid administration and supervision will be applied to the issuance and use of certificates. Acts of lending, transferring or fabricating the reemployment preferential treatment certificates shall be seriously dealt with according to the law. Enterprises or persons fraudulently obtaining the state fund or applying the preferential policies shall be solemnly investigated and punished; if the case is serious, the offenders shall be subject to criminal liabilities. IV. IMPROVING EMPLOYMENT SERVICES AND INTENSIFYING REEMPLOYMENT TRAININGS (16) Governments at all levels shall establish the public employment service system, provide registered urban unemployed persons and laid-off workers of state-owned enterprises with free-of-charge employment services, and offer free-of-charge reemployment trainings to employed-to-unemployed urban persons and laid-off workers of state-owned enterprises. The fund needed will mainly be raised through local treasury, while the state treasury may provide certain subsidies to localities with financial difficulties. The reemployment assistance system shall be established to provide persons with employment difficulties with special help and services. For public employment service institutions at all levels, the one-stop employment service pattern shall be practiced, featuring the continued handling of job-seeking registration, vocational guidance, employment recommendation, training application, appraisal and submission, archival management and social insurance relations continuation. Construction on the imformatization of employment services shall be accelerated, and the labor market networks and the open publication system thereof shall improve so as to provide timely and convenient services. Vocational education and reemployment training shall be fostered according to the changes of labor market demand and industrial restructuring. All localities shall fully exploit existing educational resources of the whole society and organize multi-layer and diverse-form reemployment trainings to enhance the employment capability of the laid-off workers. The operation of skill trainings directed at technical workers shall be linked with the practice and regulation of the state occupational qualification system. As for entrepreneurship training and enterprise guidance, services such as project consultancy and tracing support shall be provided to quicken the cultivation of a contingent of leading entrepreneurs. Government at all levels may, on the basis of qualification authentication, entrust various kinds of vocational training institutions and employment intermediary institutions to provide vocational trainings and employment services to laid-off workers. Free training and service items subsidized by the government shall be subject to strict and scientific effectiveness appraisal. (17) The urban and rural grassroots organizations shall undertake the responsibility to do a job in the work of reemployment of laid-off workers and in the work of administering and serving the retirees of enterprises and public institutions. Townships and towns where the task is arduous may establish or designate institutions in charge of labor and social security affairs at the decisions of local Party committees and governments according to the real circumstances. The communities' service function in aspects of employment and social security shall be fully exerted, and the neighborhood labor and social security institutions shall hire special service personnel and provide funds to establish a uniform social security and labor employment work system. (18) We shall regulate the order of the labor market, strengthen the supervision over employment intermediary acts, and severely counter acts of illegal employment brokering and various forms of fraudulence. Law enforcement and supervision over labor and social security shall be fortified, law enforcement and supervision acts be standardized, and such illegal conducts of the recruiters as absence of labor contract, abuse of probation period, arbitrary compression and withholding of wages, and refusal to pay social insurance be investigated and punished in accordance with the law. The law enforcement personnel over labor and social security will be reinforced and work expenses be guaranteed in light of the needs of the work. V. MAKING OVERALL PLANS, TAKING EVERYTHING INTO CONSIDERATION AND DOING A GOOD JOB IN THE MACRO CONTROL OF EMPLOYMENT (19) The relationship between in-depth reform of state-owned enterprises and expansion of employment must be handled correctly: on the one hand, to persist in the direction of state-owned enterprises reform, give impetus to the enterprises' reduction of employees to gain efficiency; on the other hand, to strengthen the guidance on resettling employees of closed and bankrupt enterprises and the staff cutting of normal production and operation enterprises. As for enterprises performing policy-based shutdown or bankruptcy, the employee resettling scheme must be debated at, and adopted by, the workers' congress and submitted for examination and approval to the coordination group of the local government over the work of enterprise merger, acquisition, bankruptcy and employees' reemployment. Where the employee resettlment scheme and the social security measures are not clear or the fund is still not available, it is prohibited from entering the process of shutdown and bankruptcy. Where a normal production and operation enterprise cuts the staff on a considerable scale, the staff cut scheme must be debated at the workers' congress of the enterprise. If it fails to pay the compensation funds against cancellation of labor contracts and properly settle the enterprise's defaulted debts to the employees, the enterprise will not be allowed to cut down on staff. A state-owned enterprise must report to the local government in advance if its staff cut exceeds a certain quantity or ratio. All localities shall, in light of the territorial principle, incorporate the reemployment of central enterprises into the local reemployment work programs, and make overall planning and arrangements to fulfill this work. Central corporations (head company) shall carry the responsibility and act in concert with the localities to do a good job in the reemployment work of their subordinate enterprises. In case of the shutdown and bankruptcy of a central enterprise, the locality and relevant departments of the central government shall form a joint task force to take charge of the work of coordinating the management of retirees, the transfer of the enterprise's social functions, the installing of employees and so on. (20) The sampling survey system of urban laborers shall be established to conduct regular sampling surveys on urban laborers nationwide and to reflect the dynamic changes of the employment and unemployment situation of the nation and various localities. The unemployment alarm mechanism shall be set up; when the total unemployment figure approaches or exceeds the warning level, governments at all levels shall take actions to defuse the tension. (21) At the same time of focusing on the reemployment work of laid-off workers, we shall make overall plans to coordinate the employment of new urban laborers and the transfer of surplus rural laborers. It is necessary to guide and help new urban laborers with their participation in the market competition and employment; as for those urban junior and senior high school graduates who fail to further their studies, the preparatory labor system shall be universally practiced to strengthen vocation education and training and to ease the employment pressure. To the rural laborers entering the city to pursue employment, fair treatment, rational guidance, improved administration and good services shall be provided and irrational restrictive policies shall be seriously removed to safeguard their lawful rights and interest. When hiring peasant-workers, enterprises shall sign labor contracts with them and pay social insurance in accordance with the law. VI. CONSOLIDATING THE TWO GUARANTEES, AND IMPROVING THE SOCIAL SECURITY SYSTEM (22)Governments at all levels shall continue to follow the divide-by-three principle (i.e., each of the three parties ¨C the government, the enterprise, and the employee himself ¨C shall undertake one third of the premiums) to settle the funds for subsistence allowances for laid-off workers, strive to expand the coverage of social insurance, strengthen the collection of social insurance premiums, further consolidate the Two Guarantees and make sure that no new cases of payment defaults happen. For the central and western regions and the old industrial bases, the state treasury will continue to give support through means of special transfer payment. We shall do a solid job in the work of laid-off workers' withdrawal from the reemployment service center and incorporation into social insurance. At present, the experiment at provincial level for perfecting the social security system is solely conducted in Liaoning Province; other localities shall proceed from their real circumstances and, on the premise of ensuring stability, adjust measures to the local conditions, give directions according to its kind, dealing with matters separately and explore methods of laid-off workers' withdrawal from the reemployment service center and incorporation into social insurance adjust measures to the local conditions. To the newly reduced personnel and out-of-the-center laid-off workers, unemployment insurance shall be provided timely in accordance to the provisions; and eligible persons shall be brought into the coverage of urban resident subsistence allowances. In the case of the laid-off workers whose labor relations cannot be cancelled for a while after their contracts expire, governments at all levels and enterprises shall continue to use funds raised through various channels to guarantee their basic living standards. We shall reinforce the work of guaranteeing the basic living standards for urban residents. All eligible poverty-stricken urban residents shall be brought into the coverage of guarantees. Inspections shall be conducted on the situation of basic living guarantees for special and needy groups, and help be offered to solve the problems they encountered in such aspects as subsistence guarantees, medical care, housing, heating, children's schooling, and supply of water, electricity and gas. (23) Measures concerning social insurance continuation of the laid-off workers shall improve and a good job shall be done in the continuation services. When the laid-off workers leave the enterprise, their social insurance payment duration and personal accounts established prior to that will be kept, but the enterprise and the persons shall make up for their defaulted social insurance premiums on a one-time basis. If the laid-off workers are reemployed by enterprises, the new recruiters and the workers shall continue to pay the social insurance in accordance with the provisions; those seeking jobs on their own or getting flexible employment, may participate in the old-age insurance scheme with reference to insurance coverage measures for individual industrial and commercial households. For those who remain to be part of the old-age insurance scheme and paying the premiums in accordance with the provisions, a combined calculation of their previous and subsequent payment durations will be made; for those who withdraw from the old-age insurance scheme and suspend their payment, their old-age pension will be calculated according to their actual premiums payment duration, after they reached the age of retirement. Those laid-off employees close to the age of internal retirement may, after consulting and reaching agreement with the enterprises, sign social insurance payment agreements and pay the social insurance premiums in accordance with the provisions when canceling their labor relations. Social insurance undertaking institutions shall set up special windows to facilitate the laid-off workers' continued social insurance coverage and premiums payment, and actively explore the social insurance methods suitable for those laid-off workers engaging in individual operations and getting flexible employment. Social medical assistance shall be practiced for those laid-off workers outside the scope of basic medical insurance. All localities and all relevant departments shall proceed from their real circumstances and intensify their efforts in formulating the specific measures and detailed implementation rules for carrying out the present Circular and ensure that the spirit of the present Circular is upheld in practice. |
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