Guideline 16. Supporting voluntary compliance and formalization

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The institution combines administrative solutions with supporting policy measures to foster compliance with minimal intervention required.

Guideline code

EXT_02100

Mechanism

The management should facilitate insured members’ access to their records of contributions as well as their rights and entitlements online at any time through a variety of means.
A multifunctional unified social security card loaded with financial functions might be an effective means in boosting voluntary compliance.
When outsourcing non-core business operations (such as cleaning and security services) to external agencies, the management should include protection of employees’ minimum wage levels and safety and health at work, as well as the provision of social security according to legal stipulations, as a non-negotiable part of the outsourcing contract and set a good example in enhancing social protection for difficult-to-cover groups.
The management should formulate transparent rules in the case of non-compliance in paying contributions. This is particularly important given the temporary loss of eligibility that can arise from non-payment. The institution may propose to the authorities the implementation of special policy provisions such as linking the issuance and renewal of business licences with social security registration and remittance of contributions. This mechanism also contributes to the formalization of work. Other external policy levers have been found to provide incentives to foster enrolment and continued contribution. For example:

Adding a non-contributory element of the benefit for certain low-income groups;
Additional free-of-charge insurance for other risks;
Guaranteed inflation-proof interest rate for accumulated savings in individual pension or provident fund accounts.

Parent

Structure

The management should seek to adopt practical and innovative measures to promote voluntary compliance by difficult-to-cover groups.
These policies and strategies should be aligned with the institutional strategies on compliance risk management promoting voluntary compliance, as well as on supporting the effective extension of contributory social security coverage and formalization.