Aug. 2025 - Impact of the new labour dispute judicial interpretation on social insurance

Article 19

• Agreements between employers and employees to waive social insurance payments are legally invalid.
• If an employee terminates the labour contract due to the employer's failure to pay social insurance, the employer is obligated to compensate the employee.
• If an employer retroactively pays the unpaid social insurance after the employee has terminated the labour contract, the employer also has the right to request the employee to return the social insurance compensation already paid.
   

Point of attention

• Employers are legally obligated to pay social insurance for the employees.
• Regardless of any written agreement, employees are entitled to request payment of social insurance, and may also seek compensation if social insurance payments were not made.
   

Compliance requirement for “three unify”

• Employees seeking benefits, such as pensions and maternity insurance, may be affected.
• Employers' injury insurance compensation may be impacted, potentially resulting in higher payments.

Effective date

• This interpretation was released on 31 July 2025, and shall come into force on 1 September 2025.

Action recommended

• Check that social insurance records align with the labour contract.
• Consider establishing a branch office in the city where employees are based to ensure compliance with cross-regional employment requirements.
• Centralise social insurance contributions at the Company's registered location.

We remain available should you have any questions. Please do not hesitate to reach out to your contact at Forvis Mazars.

References:
Supreme People's Court, Fa Shi [2025] No.12: Interpretation (II) of the Supreme People's Court on Issues Concerning the Application of Law in the Trial of Labour Dispute Cases (link here in Chinese).