History

Each and every public or private factory, mine, or other undertaking shall
allocate employee welfare fund for carrying out of employee welfare
activities.

A factory, mine, or other undertaking shall set aside a sum of money for the
welfare fund in accordance with the following provisions:
1.One to five per cent of the total amount of capital at the time of
establishment;
2.0.05 to 0.15 per cent of the entire monthly business income;
3.0.5 per cent of the monthly salary or wage of each employee; and
4.20 to 40 per cent of proceeds from sale of wastes at the time of each
sale.
In the case of a govermment agency which has no business income, allocations
mentioned in item 2 may be made proportionately from fess or other income of
the agency.
A public enterprise which has already made provisions for an employee
welfare fund in its budget not lower than the percentage mentioned in item 2
shall be exempt from making further allocations.

For workers without fixed employers, the welfare fund shall be provided for by
the labor union concerned through the allocation of 30 per cent of the total
membership fees. If necessary, an application may be made to the competent
authority for a subsidy.

Persons with extraordinary merit in the promotion of employee welfare
activities may be given due monetray awards by the competent authority.

The employee welfare committee to be formed jointly by the labor union
extablished in accordance with law and the factory, mine, or other undertaking
concerned shall be responsible for the custody and the use of the welfare
fund. The organic rules of the employee welfare committee shall be
prescribed by the Ministry of Interior.
No less than two-thirds of the members of an employee welfare committee
referred to in the preceding paragraph shall be representatives of the labor
union concerned.
The provisions of the preceding two paragraphs shall apply mutatis mutandis to
welfare activities carried out in accordance of the provisions of article 3 of
the Regulations.

Every factory, mine, or other undertaking and the labor union concerned
shall at the end of each year draw up a financial statement showing all
receipts and disbursements of the welfare fund, which shall be announced and
submitted to the competent authority for referrence. The competent authority
may, if necessary, examine the account books thereof.

Employee welfare fund shall not be used for any other purpose; provided that
an amount not exceeding 10 per cent of the fund may, after due report has been
filed with the competent authority, be made available as a subsidy to a
national, provincial, municipal or hsien labor union for carrying out
welfare activities.

Employee welfare fund shall not be subject to confiscation.

Employee welfare fund shall have the preferential right to receive
performance.

The person responsible for the custody of employee welfare fund shall be
liable to indemnity for any loss sustained thereof through his ovn fault.

In case the allocation has not been made or an insufficient allocation has
been made in contravention of articles 2 and 3, the competent authority
shall subject the person responsible to a fine not exceeding 1,000 yuan and
shall ask him to make the requisite allocation.

In case of contravention of article 6, the person responsible shall be
punished with a fine of not more than 500 yuan.

In case of embezzlement of employee welfare fund or other corruptive
practices, the person responsible shall be severely punished in accordance
with the appropriate provisions of the Criminal Code.

The Act shall become effective on the day of promulgation.