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Legal Updates

Government Regulation on Sanction for Non-Compliance with the National Social Security Law

The Government recently issued Government Regulation No. 86 of 2013 dated 24 December 2013 on Procedures for Imposing Administrative Penalties on Employers excluding State Officials, Certain Others, and Employers, Workers, and Recipients of Social Security Assistance (“Regulation”) as implementing regulation mandated under the Law No. 24 of 2011 on the Social Security Agencies. The Regulation is relevant to employers and individuals who fall under the national social security program (which began to operate on 1 January 2014) managed by the Agencies. The Regulation provides that the new national social security program is mandatory for (i) “Employers”, and (ii) any person who is not classified as an employer, worker, or recipient of social security subscription assistance (“Others”). Employers and Others that fail to perform the obligations under Articles 3 and 4 of the Regulation may subject to the following sanctions: written warnings; fines (for employers only); and sanctions related to licensing (“No Licensing Saction”). No License Sanctions means that violator of the prescribed obligations will not gain access to certain public services such as licensing and certain public documents. No License Sanctions may be lifted after the non-complying party has satisfied its obligations under Articles 3 and 4 of the Regulation. To obtain more details on the above regulation, please contact us.

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