The mandatory social security payment policy in China will come into effect on September 1st, and any employment agreements or commitments that evade social security payment will be deemed invalid, which is expected to have an impact on many small and micro enterprises such as catering and shops in China.

According to the Interpretation on the Application of Law in the Trial of Labor Dispute Cases issued by the Supreme Court of China last Friday (August 1), since September, any agreement not to pay social security, whether negotiated between employers and employees or unilaterally promised by employees to employers, is invalid.

In addition, if the company fails to pay social security for its employees, the employees have the right to terminate their labor contracts based on this and demand that the company pay economic compensation, make up for social security payments, and charge a daily late fee of 0.05%. If an employee's medical expenses cannot be reimbursed due to non payment of social security, the company shall provide full compensation.

Employers do not pay social security for their employees, which has been considered illegal in China in the past. However, for some small restaurants and vendors that make profits on Weibo, the implementation of social security payment is not very strict. The interpretation of the Supreme People's Court means that in the future, if employers do not pay social security for their employees, they will have to make up for it or even compensate, which quickly sparked discussions among Chinese netizens.

An article titled 'The baozi shop at my doorstep is about to close' has been widely circulated on social media. The article states that the owner of the baozi shop in front of his house is expected to close soon because the shop is not very profitable and will have to pay social security for five employees in the future, which he cannot afford.

Besides employers, many workers are also unwilling to pay social security and prefer to increase their personal cash income. Some analyses suggest that China's tightening of relevant regulations may be related to the current tight balance of social security income and expenditure.

With the intensification of population aging, the number of people receiving pensions in China is increasing, while the number of people paying pensions is growing slowly. The sustainability of the social security system is facing severe challenges. Currently, China is adopting various methods to ensure future income and expenditure balance.

Chen Yifang, the chief judge of the Civil First Division of the Supreme Court of China, explained that labor dispute cases such as non compete restrictions, welfare benefits, and social insurance disputes have been on the rise in the past two years. The relevant regulations are aimed at implementing China's labor employment and social security system and actively promoting the construction of harmonious labor relations.

The mandatory social security payment policy in China will come into effect on September 1st, and any employment agreements or commitments that evade social security payment will be deemed invalid, which is expected to have an impact on many small and micro enterprises such as catering and shops in China.

According to the Interpretation on the Application of Law in the Trial of Labor Dispute Cases issued by the Supreme Court of China last Friday (August 1), since September, any agreement not to pay social security, whether negotiated between employers and employees or unilaterally promised by employees to employers, is invalid.

In addition, if the company fails to pay social security for its employees, the employees have the right to terminate their labor contracts based on this and demand that the company pay economic compensation, make up for social security payments, and charge a daily late fee of 0.05%. If an employee's medical expenses cannot be reimbursed due to non payment of social security, the company shall provide full compensation.

Employers do not pay social security for their employees, which has been considered illegal in China in the past. However, for some small restaurants and vendors that make profits on Weibo, the implementation of social security payment is not very strict. The interpretation of the Supreme People's Court means that in the future, if employers do not pay social security for their employees, they will have to make up for it or even compensate, which quickly sparked discussions among Chinese netizens.

An article titled 'The baozi shop at my doorstep is about to close' has been widely circulated on social media. The article states that the owner of the baozi shop in front of his house is expected to close soon because the shop is not very profitable and will have to pay social security for five employees in the future, which he cannot afford.

Besides employers, many workers are also unwilling to pay social security and prefer to increase their personal cash income. Some analyses suggest that China's tightening of relevant regulations may be related to the current tight balance of social security income and expenditure.

With the intensification of population aging, the number of people receiving pensions in China is increasing, while the number of people paying pensions is growing slowly. The sustainability of the social security system is facing severe challenges. Currently, China is adopting various methods to ensure future income and expenditure balance.

Chen Yifang, the chief judge of the Civil First Division of the Supreme Court of China, explained that labor dispute cases such as non compete restrictions, welfare benefits, and social insurance disputes have been on the rise in the past two years. The relevant regulations are aimed at implementing China's labor employment and social security system and actively promoting the construction of harmonious labor relations.