GUANGZHOU: Thirty enterprises in South China's Guangdong Province have been blacklisted by the local government for acute defaulting of employees' wages.

The thirty enterprises, most of which are private, have defaulted a total of more than 20 million yuan (US$2.5 million), affecting more than 8,000 workers.

The blacklist includes five Hong Kong-invested, one Taiwan-invested, and three foreign-invested companies.

"To deter employers from defaulting wages, last year we began to expose companies with bad records once or twice a year," Zhang Xiang, director of the publicity office of Guangdong Provincial Labour and Social Security Department, told China Daily on Friday.

"The actual number of companies that are defaulting on wages is very large. We blacklisted these 30 companies because they refused to mend their ways after repeated education, warnings or even heavy punishments."

The campaign to expose cheating companies began in September last year.

Zhang said the policy has sent a warning to employers.

One company on the blacklist, Guangzhou Baoying Shoes Factory, hit the headlines last year after it defaulted on wages of 586 staff valued at more than 2 million yuan (US$253,000).

The workers protested against the factory and there were fierce fights with security staff. Eventually they went to court, with the company arguing that it was bankrupt after the finance director absconded with all the money.

The court auctioned the factory for 1.2 million yuan (US$150,000) to pay some of the salaries.

Statistics from Guangzhou Bureau of Labour and Social Security show that between 2002 and 2005 the bureau demanded more than 300 million yuan (US$37.5 million) from employers to pay more than 300,000 workers in the city.

Since the government cannot help every worker because of limited resources, experts suggest setting up a legal system and requiring every company to leave a certain deposit before it starts business.

If the company defaults wages, the court or the government can take some money from the deposit to pay workers.

The system has been introduced in some cities including Shenzhen, said Chen Guilan, an official of Baiyun District Court in Guangzhou.

(China Daily 06/26/2006 page3)