By Xu Yingjie & Shi Ying, Research Team on “Research on Improving Business Environment”, Enterprise Research Institute, DRC

Research Report, No.55, 2021 (Total 6120) 2021-3-16

Abstract: To protect the legitimate rights and interests of migrant workers and effectively reduce the burden of enterprises, local governments in different regions have made innovation-oriented explorations on improving the wage deposit system for migrant workers’ payment. By focusing on key industries, they have diversified payment methods, increased the number of entities for payment, optimized payment mechanisms and standards, and implemented differentiated management patterns. These reform measures have made remarkable achievements conducive to the establishment of building of a unified market, the advancement of fair competitions and further reduction of the burdens on enterprises. However, the progress for pushing ahead with the reforms in various regions is quite different. In some areas, the burden on enterprises is still heavy; non-cash payment such as bank guarantee has not been widely applied, which would lead to unfair treatment to enterprises; the wage deposit refund system needs to be refined. For regions with slower reform progress, they need to refer to practices of advanced regions and accelerate reforms to further reduce the burden of payment on enterprises in terms of wage deposit. If conditions permit, it is advisable for local governments to cancel wage deposit paid by enterprises in different phases and on a type-by-type basis. In addition, efforts need to be made to further improve non-cash payment mechanisms such as bank guarantee to expand the coverage of the system and enhance fairness. Work needs to be done to continue optimizing the wage deposit refund mechanism so as to further address the issue of tight cash flow.

Keywords: migrant workers, wage deposit, reform modes