Growing labor sector puzzled on insurance

0 Comment(s)Print E-mail China Daily, May 8, 2019
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China is considering widening its net of injury insurance to cover people who provide casual services to online app-based companies - drivers of car-hailing services or food couriers, for example.

It's part of an effort to manage the downside of the gig economy.

While experts are hailing the concept as a recognition of casual workers' rights, many of those who would benefit fear it could add to their financial burdens. Such worries are also shared by their employers.

The Ministry of Human Resources and Social Security said earlier that it plans to revise work injury insurance regulations in light of the tens of millions of people in the sector. No more details were provided.

The group has so far been legally excluded from the welfare benefits associated with formal employment contracts. That's because in many cases they need only register with an online platform and verify their identity before starting the service work. They can also freely quit without restriction or penalty.

The casual nature of such arrangements means great mobility for such workers, and buying injury insurance has been financially unappealing for both employers and employees.

But as the number of people working in the gig economy is expected to jump from 70 million last year to more than 100 million next year, the group's lack of job security can no longer be ignored.

Jiang Ying, a professor at China University of Labor Relations and a worker rights activist, said a change of the rules is urgently needed for the fast-growing industry, and could have lasting significance for its healthy development.

She said the original rules are complicating things by focusing too much on labor relations, which are evolving with the rise of the gig economy.

"The new rules should be based on occupations," she said. "Anyone who is legally employed should be entitled to job security and benefits."

Despite the potential benefits, some of the sector's insiders have expressed concerns that the change could add to their financial woes.

Dou Liguo, 44, who has worked for the courier giant STO Express as a deliveryman for the last decade, said his fellow workers dislike the idea of cost-sharing between workers and employers.

"The tight race between mushrooming courier giants has gradually turned into a malign competition, and the profit margins are low," he said. "That means few will pay hard-earned money to secure workers for jobs they can quit anytime."

Couriers are among those thriving in the gig economy, but the job is among the least stable because of its labor-intensive nature.

Lin Xinjian, who oversees workers' rights issues at STO Express, said more than half the company's employees quit within six months, and barely 30 percent make it beyond three years.

"Few of them think they are handsomely paid, and consumer complaints and injuries are not uncommon in the sector, which worships speed," he said.

Lin said the change could potentially add financial pressure to employers, which ultimately could translate into higher prices for customers. To counter that, he suggested that the cost be shared by relevant parties, such as trade unions and other associations.

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