The Supreme People’s Court of the People’s Republic of China has recently issued a judicial interpretation — Interpretation (II) of the Supreme People’s Court on Issues Concerning the Application of Law in the Trial of Labor Dispute Cases (the “Interpretation”), which took effect on September 1, 2025. The Interpretation is expected to have significant implications for all employers in China, including foreign invested enterprises, and marks a further tightening of the requirements imposed on employers under China’s labor laws in the context of labor dispute arbitration and judicial practice.
1. Payment of social insurance contributions as a mandatory obligation
The Interpretation explicitly provides that any agreement, regardless of its form, under which an employer and its employee agree not to pay social insurance contributions for the employee is deemed invalid. Such agreements cannot exempt the employer from its statutory obligation to make social insurance contributions for
