By Sun Jin (Marlow), Chinese attorney at Law, Wang Jiwen (Victor). Republishing this article please indicate author and source of this article. July 21, 2015

The system of employment injury insurance is one of the social insurance systems in Chinese labor law system, which means that nation will provide insured employees with medical service, occupational rehabilitation and economical compensation, who suffered accidental injury, occupational disease while they work at some special situation; also provide their supported relatives with substance help such as subsidies when the insured employee have passed away. This insurance is compulsive for employers according to Chinese Labor Laws. As a matter of fact, this is a way to transfer risk in terms of employment injury. Nation eliminates people’s economic difficulty, metal anxiety and sustains their normal life after accidents happened via a financial plan before accidents happened.

1. The meanings of enforcement of employment injury insurance system is significant to employees and employer companies

1.1 Enforcement of employment injury insurance system has below three meanings to employees:

A) Employment injury insurance system secures employees’ right of gaining medical cure, life support, economic compensation, and occupational rehabilitation after they suffered accidental injury, occupational disease. It is a necessary measure to safeguard employees’ legitimate rights and interests.

B) Employment injury insurance system can secure employees and their supported relatives with basic life need after industrial injury happened especially when employees thus passed away, to avoid the situation that injury employees and/or their relatives fall into poverty life. To some extent, this can relieve employees and their relatives’ concern for future. Hence this is a social insurance system to help injury employees and their relatives.

C) Employment injury insurance system secures injury employees and their relatives’ legitimate rights and interests, which confirms that the society has done a social contribution for employees, which is also helpful to strengthen working enthusiasm for employees.

1.2 Enforcement of employment injury insurance system has below two meanings to employer companies:

A) Employment injury insurance secures employer companies as well, especially for enterprises that have some tightness of financial situations. As employment injury insurance is with a feature of mutual help, it can uniformly raise money and divide risks, for employer companies, especially for enterprises who have financial difficulties, more or less. When they encounter a significant industrial injury of their employees, they need to pay injured employees some huge sum of compensation. And if national social insurance institution pays it for their behalf from swap fund of society, this can make up deficiency of company fund, also can lower employers’ risk and loss from industrial injury to the lowest level.

B）Employment injury insurance is helpful for secure production, combined with measures over advancing labor condition, safety education, publicizing on prevention of disease and injury, medical rehabilitation etc, employment injury insurance can improve employees’ safety awareness, promote company safety production and go on smoothly, reduce the rate of industrial injury accidents, and then lower economic loss for company further.

2．It’s necessary to push employment injury insurance system ahead actively among employers, so as to set up harmony environment of companies.

When employees were injured, or crippled, or killed, and hence temporarily or permanently lost their working ability because of work, nation will provide them with material help. Hence to push employment injury insurance ahead compulsively, is an important element for social harmony, and is a significant measure of safeguard to employers and employees’ legitimate rights and interests, of relief company burden, and of safeguard social stability.

2.1 Participation in employment injury insurance can safeguard company and employee legitimate right and interest better. As growing pace of urbanization and highly development of transportation and construction industry etc, employees’ risk of facing occupation injury grew increasingly, at the same time, once industrial injury happened, some employers didn’t deal with them as industrial injury by means of all kinds of excuses such as employee’s unprofessional operation and violation of company’s regulation, when some employees’ legitimate right and interest can’t get secured. If one employer company participates in employment injury insurance, once industrial injury happened, the local labor security administrative department will conduct identification of industrial injury legally, if it is identified as industrial injury, then it will be conducted identification of level for labor capability by labor identification department, and then the injured employee may get compensated from social insurance department according to related laws and regulation, when employee’s legitimate right and interest will be safeguarded better.

2.2 Participation in employment injury insurance can relieve burden of company. For example, if one employee get injured in workshop, and then was identified as industrial injury, and reach six level on loss of labor capability, according to related Chinese labor law, if the employer didn’t participate in employment injury insurance, probably, this employer company has to make payment to employee a sum of around CNY200,000 as compensation including medical expenses, invalidity allowance etc, if the quantity of injured employees reaches 4 or 5 in a year, all of these compensation will be a huge sum for a company in terms of finance, especially for some small enterprises, they may hence at brink of bankruptcy. But from another angle, if the employer company had participated in employment injury insurance and paid the insurance fee for employees, it will not make big payment to any of injured employee at all, it will just only make small proportion of payment account for total compensation, the left will be afforded by industrial injury insurance fund department. For a employer company who may often have injured employees, this can really be helpful, so participation in employment injury insurance, can reduce employer company’s industrial injury risk to a lowest level.

2.2 Participation in employment injury insurance, can regulate labor relationship better, and then safeguard social stability. If employer didn’t participate in employment injury insurance, once industrial injury accident happened, in the process of dealing with industrial injury accident, injured employee and relatives will have doubt to impartiality of dealing with industrial injury accident, then create discontent with result of dealing, easily result to tension of labor relationship even intensification of contradiction, arise instability factors. If one company had participated in employment injury insurance, company are likely to report accident to labor security administrative department, when labor security administrative department intervene in this accident, will verify this accident and conduct identification of industrial injury, if it belongs to industrial injury, so injury employee will get compensation from industrial injury insurance fund department. Hence, it will be get done better for injury accident, involvement of government can broker labor relationship between company and injured employee, will effectively prevent some social instability factors, the employer company won’t be costed more energy and finance on the aspect of industrial injury accident, either.

Companies need to develop, the key is innovation, and the key of innovation is employee’s creativity and initiative. As we all know, employee’s creativity and initiative needs company to show care and love for employees. As long as the company sincerely cares and loves his employees, employees will love and care for his company, and fully exert their creativity and initiative in production and operation, hence to make a huge contribution for company’s development. Companies’ participation in employment injury insurance, will make all employees felt that the employer company does care and love them, so they will strengthen company’s cohesive force and centripetal force further, and then mobilize employee’s productive initiative and creativity, and the employer company will develop better and faster.