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New Migrant Worker Department faces a daunting task

Beijing has set up a new central government department designed to promote and defend the interests of China’s more than 130 million migrant workers. The official media on 21 July heralded the move as a “landmark” development signifying the government’s commitment to building a “harmonious society.” However, the Department of Migrant Workers’ Affairs will face an uphill task. 

The remit of the new department within the restructured Ministry of Human Resources and Social Security is to tackle and resolve serious and widespread problems faced by migrant workers, such as wages in arrears, lack of social security and other benefits, as well as the institutionalized discrimination (engendered by the household registration system) migrants and their families face in the cities they work in. See Migrant Workers in China.

The problem of wages in arrears alone is so serious that the government itself estimated the total unpaid wage bill from January 2005 to July was 66 billion yuan. It is migrant workers, particularly those in the construction industry, who suffer most from non-payment of wages. Wages in arrears at individual construction projects often run into millions of yuan, with workers being unpaid for up to a year or even more. Some local governments now require construction companies to set aside funds for workers’ wages before a contract is awarded. However, non-payment of wages remains an endemic problem for migrant workers in nearly all sectors of industry.

Another critical problem is the current inability of migrant workers to remit their pensions to their hometowns. Although, local regulations vary considerably, most migrant workers can only reclaim their own social security contributions, while the employer’s contribution (up to twice the employee’s contribution) remains with the local government where they are employed. The city of Suzhou in Jiangsu does allow migrant workers to transfer their pensions if the receiving government department agrees. However, at present, 80 percent of all transfers out of Suzhou remain within the province.

The restrictions on the transfer of social security and pension funds has led to many migrant workers refusing to sign labour contracts that mandate social security payments even though the new Labour Contract Law requires them to do so. Indeed, anecdotal evidence suggests, several provisions of the Labour Contract Law, which are designed to protect workers rights, are seen by many migrant workers as an unnecessary encumbrance.

Government officials at a press conference to launch the new department said one of its major tasks would be to get migrant workers to sign labour contracts as a means of protecting their rights. However, if migrant workers calculate that the financial benefits of not signing a contract will be greater than the long-term benefits in terms of rights protection of signing a contract, they are unlikely to sign.

For the Department of Migrant Workers’ Affairs to be truly effective, the household registration system will have to be significantly reformed or abolished entirely. The household registration system is an immensely complex structure involving many different vested interests including the powerful public security bureau. The new migrant workers’ department is essentially a centralized version of the Migrant Workers Joint-Working Committee, established by the State Council in 2006. The committee was comprised of representatives from 31 different government departments, and it was hoped the newly created ministerial department would be more efficient and effective in tackling labour issues specifically. However, it is unclear at present whether or not the new department will have the power to decisively influence other government ministries and departments.

In a related restructuring measure, the official media announced on 21 July that, local labour supervision and inspection departments will be upgraded to bureau status and given greater financial and human resources to more effectively enforce the country’s labour laws.