The Henan Provincial Department of Human Resources and Social Security, Department of Finance, Medical Insurance Bureau, and Provincial Taxation Bureau jointly issued a notice stating that, starting from January 1, 2027, the annual social insurance contribution period across the province will be adjusted from July 1 — June 30 of the following year to January 1 — December 31, fully aligning with the calendar year. This adjustment brings great convenience to a large number of finance and HR professionals. Previously, the contribution year adopted a “half-year + half-year” model, which conflicted with financial bookkeeping methods and often caused various unexpected problems. Now, after the policy adjustment, it not only simplifies operational procedures, but also marks that the social insurance contribution method has officially been brought into line with other bookkeeping and charging models, which also provides more favorable conditions for future social insurance compliance inspections (such as cross-checking social insurance and individual income tax data, verification of social insurance and reimbursement information, etc.).

Lv Dongdong of Sichuan Yongan Guangxun said: “Across the country, except that Tibet has relatively fewer small workshops, most other provinces basically have 2–3 informal small workshops, and some provinces such as Hebei, Henan, and Zhejiang even have more than 10, with more than one hundred small workshops nationwide in total.” These small workshops springing up everywhere are creating hidden risks for both the industry and the environment.

Huang Haiyan, Executive Vice President and Chief Sustainability Officer of Chint New Energy, shared insights from the perspective of an industry participant in two aspects: “First, the current market order for recycling photovoltaic modules is still not sufficiently standardized. Some companies simply clean discarded modules and then put them back into the market, making product quality difficult to guarantee and affecting the industry ecosystem; second, some recycling and disposal companies only obtain short-term profits by simply dismantling aluminum frames, while high-value resources such as silver, silicon, and copper in the modules are wasted, resulting in resource loss.”

As is well known, small-workshop recycling and disposal enterprises have an inherent cost advantage. Their transportation costs and labor costs are low, and at the same time, they make no environmental protection investment, so their overall costs are lower than those of compliant enterprises. Therefore, they are able to secure discarded photovoltaic modules at higher recycling prices, while compliant enterprises have high operating costs and no price advantage, making it easy for them to “go hungry” and difficult to achieve economies of scale in disposal. In order to ensure production capacity, compliant enterprises sometimes have no choice but to purchase processed raw materials from small workshops.

The competitive advantage of Henan’s small photovoltaic recycling workshops essentially relies on reducing costs through non-compliant practices, with labor and social insurance issues standing out prominently. Their workforce includes local villagers and temporary workers, wages are agreed orally, and in general no employment agreements are signed, nor is employment registration completed, thereby evading social insurance-related liabilities. The overwhelming majority of workshops do not enroll workers in social insurance, while illegal dismantling operations involve relatively high safety risks such as cuts and poisoning from hazardous substances, with serious deficiencies in related protections. Wages are often paid in cash or through personal transfers, lacking standardized payroll accounts, and individual income tax is also not declared in accordance with regulations, with employment-related information deliberately concealed.

If strict future social insurance inspections are implemented, they will directly impact the core cost advantage of Henan’s small photovoltaic recycling workshops. Back payments, late fees, and fines will substantially increase labor costs, operations such as cash wage payments will become ineffective, and high-risk employment exposure will be revealed.