China’s New Interim Provisions on Elderly Workers: Practical Implications for Employers
In China, demographic changes, particularly the ageing trend, have increasingly shaped labor market policies in recent years. In 2025, the gradual increase of the statutory retirement age, together with the newly implemented flexible retirement system, marked a significant step in this regard (for details, please refer to our previous newsletters [Raise of Statutory Retirement Age of Employees in China] and [China Releases New Regulations for Implementing Its New Retirement System]). Against this background, it has also become increasingly common for individuals who have exceeded the statutory retirement age or have already retired to continue working.
In May 2026, the Ministry of Human Resources and Social Security, together with several other government authorities, jointly issued the Interim Provisions on the Protection of Basic Rights and Interests of Elderly Workers (the “Provisions”). The Provisions will come into effect on 1 July 2026. The Provisions establish for the first time a dedicated legal framework at the national level for the engagement and protection of such elderly workers. Notably, the Provisions seek to strike a balance between protecting the basic rights and interests of elderly workers on the one hand, while preserving contractual flexibility and limiting the compliance burden for employers on the other hand. Below we summarized the key aspects of the Provisions and explained their practical implications for employers:
1. Scope of Application
The Provisions apply to both (i) workers who have exceeded the statutory retirement age (as determined under the raised retirement age standards); and (ii) workers who retired early under applicable laws before reaching the statutory retirement age (collectively referred to as “Elderly Workers” in this newsletter). Where such Elderly Workers perform paid work under the employer’s management, employers shall comply with the Provisions, including ensuring the basic rights and interests of Elderly Workers as further illustrated below.
This approach addresses a longstanding controversy regarding the legal characterization of Elderly Workers. In the past, if a worker had already started to receive pension benefits, the relationship was generally treated as a service relationship governed by the PRC Civil Code, with terms and conditions largely subject to free agreement and almost no statutory protection. As for workers who had exceeded the statutory retirement age but had not yet started to receive pension benefits, their legal position was unclear. Different views existed on whether and to what extent employment law protections continued to apply to such workers. This created great uncertainty to the rights and obligations of both parties.
Under the Provisions, it is no longer necessary to distinguish between “employment” and “service” relationships for Elderly Workers. Instead, a unified baseline of protection now applies to all Elderly Workers within the application scope of the Provisions, regardless of whether they have started to enjoy pension benefits or not.
It must be noted that the Provisions do not apply to employees who have formally opted for flexible delayed retirement under the flexible retirement system. During the delayed retirement period, such employees continue to be protected by the PRC Employment Contract Law. Further, employers in Shanghai engaging foreign employees should be aware that, under the previous practice, foreign employees holding valid work permits would also continue to be protected under PRC employment laws even after reaching the PRC statutory retirement age. Whether and how the Provisions will apply to such employees remain to be further clarified by the relevant authorities.
2. Mandatory Requirements
- Mandatory Written Work Agreement
Under the Provisions, employers are required to conclude a written work agreement with Elderly Workers. Such agreement shall cover key terms including the contract term, work content, work location, working hours, rest and leave, remuneration, social insurance, labor protection and occupational hazards’ prevention.
Although the Provisions do not specify the legal consequences of a failure to conclude a written work agreement, and the statutory penalty under employment law, i.e. double wages for failure to sign a written employment contract, is not expressly extended to this context, it is still advisable for employers to enter into written agreements with Elderly Workers. This will help to clearly define the rights and obligations of both parties and reduce future disputes.
- Mandatory Baseline Protections
Under the Provisions, employers must ensure that Elderly Workers are provided with mandatory protections on their basic rights and interests, including their rights in relation to remuneration, rest and leave, occupational safety and health, and work-related injury. In particular:
(1) Remuneration
Unlike under a service relationship where remuneration standards and payment cycles can be agreed more flexibly, the Provisions provide that the applicable local minimum wage standards shall also apply to Elderly Workers, and remuneration must be paid in monetary form at least on a monthly basis.
(2) Rest and leave
In the past, for retirees engaged under a service relationship, employers could agree with them on working hours, rest and leave freely without being subject to statutory requirements such as overtime limits and overtime pay under PRC employment laws.
Under the Provisions, standard daily and weekly working hours (i.e. 8 hours per day and 40 hours per week) and statutory public holidays under PRC labor laws shall also apply to Elderly Workers. Notably, the Provisions specifically provide that overtime should generally not be arranged for Elderly Workers. Where overtime is arranged, it must comply with statutory limits (i.e. no more than 3 hours per day and 36 hours per month), and overtime pay must be provided in accordance with the law (150% on working days, 200% on rest days, and 300% on statutory holidays). It remains to be further clarified whether alternative working hour systems (such as the flexible or comprehensive working hours systems) may be applied to Elderly Workers.
As for other types of leave entitlement, such as statutory annual leave, sick leave pay and medical treatment period, etc, the Provisions do not provide explicit guidance on whether Elderly Workers are entitled to such benefits. This remains subject to further clarification through future legislation and judicial practice. Currently, employers may wish to negotiate with Elderly Workers on such matters and agree expressly in the written work agreement.
(3) Occupational safety and health
The Provisions impose specific obligations on employers to safeguard the health and safety of Elderly Workers. Employers are required to assign suitable positions and determine appropriate work intensity based on the physical condition of Elderly Workers, and must not assign them to hazardous work or work that may be harmful to their physical or mental health. In addition, employers must provide occupational safety and health training, comply with applicable safety standards and procedures, and take measures to prevent workplace accidents and occupational diseases.
(4) Work-related injury insurance
Historically, participation in social insurance schemes under PRC law was closely tied to the existence of an employment relationship. Elderly Workers engaged under a service relationship were generally not eligible to participate in statutory work-related injury insurance. As a result, where such workers were injured in the course of performing work duties, the case would typically be handled under the tort liability rules of the PRC Civil Code. In recent years, some local authorities implemented pilot rules allowing employers to voluntarily enroll such workers in work-related injury insurance. However, due to the inconsistency of standards across regions and the uncertainty of local policies, in practice, many employers continued to rely on commercial insurance to mitigate potential risks.
The Provisions, for the first time and at the national level, mandatorily require employers to enroll all Elderly Workers in work-related injury insurance. In the event of a work-related accident or occupational disease, Elderly Workers will be entitled to undergo work injury recognition and labor capacity assessment, and to receive corresponding work-related injury benefits according to law. Notwithstanding the above, the detailed rules governing the scope of work-related injury benefits for Elderly Workers, as well as the legal consequences of an employer’s failure to enroll Elderly Workers in work-related injury insurance, remain unclear and are expected to be further clarified by implementing rules to be issued separately by the authorities.
3. Matters Subject to Contractual Agreement
Beyond the mandatory baseline protections outlined above, the Provisions also grant employers and Elderly Workers considerable flexibility to agree on other matters by contract.
- Negotiable termination conditions
Unlike the stringent termination requirements for termination of employment contracts under PRC labor laws, the Provisions adopt a relatively flexible approach to the termination of work agreements with Elderly Workers. In addition to standard termination grounds such as contract expiration, completion of work tasks and mutual termination, the parties are also allowed to agree on specific termination conditions (such as termination upon prior notice).
Further, unless otherwise agreed between the parties, statutory severance payments or compensation for unjustified termination do not mandatorily apply to Elderly Workers either.
- Flexible options for continued contributions to pension and medical insurance
As the Provisions also apply to individuals who have reached the statutory retirement age but have not yet started to receive basic pension or retiree medical insurance benefits due to insufficient contribution years, for such individuals, the Provisions also clarify the available options for their continued contributions to such insurance.
In the past, this scenario could be difficult for employers to manage. If an employer made such social insurance contributions for such individuals, this could be viewed as an acknowledgement of the existence of an employment relationship, which would trigger broader employer obligations and labor protections under PRC laws.
Under the Provisions, this concern is addressed. If such individuals wish to continue making pension and/or medical contributions in order to be entitled to pension and/or medical insurance benefits upon retirement, such individuals may either continue making contributions in their individual capacity, or upon mutual agreement with the employer, have their employers make such contributions for them. Neither option will trigger additional employer obligations beyond the mandatory baseline protections under the Provisions.
- Other matters
For other matters not expressly covered by the mandatory baseline protections under the Provisions, such as bonuses and other non-mandatory benefits, non-competition and non-solicitation obligations, IP protection and confidentiality obligations, etc, the parties may also agree on the relevant arrangements in the written work agreement.
4. Dispute Resolution
The Provisions establish a two-track dispute resolution framework that distinguishes between disputes concerning mandatory baseline protections and other disputes. Generally:
(1) Disputes concerning the four kinds of mandatory baseline protections as expressly provided under the Provisions, including remuneration, rest and leave, occupational health and safety, and work-related injury benefits, are subject to the standard labor dispute resolution procedures. For such disputes, Elderly Workers shall first file a labor arbitration at the competent arbitration commission before filing any civil litigation at courts.
(2) By contrast, other disputes such as those concerning termination of the work agreement, severance payments, non-competition obligations or other contractually agreed matters, may be brought directly before the civil courts without first going through labor arbitration.
5. Key Takeaways
Given that the Provisions will take effect soon on 1 July 2026, employers may wish to promptly review their current practices and take the following steps:
(1) Employers should review their current workforce to identify any Elderly Workers who will fall within the application scope of the Provisions and assess whether existing arrangements require adjustment to ensure compliance.
(2) Employers should prepare/update their written work agreement templates for Elderly Workers to ensure that all required terms are covered and are not in violation of the mandatory baseline protections on Elderly Workers.
For matters not explicitly addressed by the Provisions (such as entitlement to annual leave and sick leave, application of special working hour systems, etc), although some uncertainties remain, it is advisable to address these expressly in the written work agreement to mitigate risks.
(3) Employers should confirm with the relevant local social insurance authorities about the procedures for enrolling Elderly Workers in work-related injury insurance, and ensure timely enrollment upon implementation of the Provisions. Pending the issuance of detailed rules on work injury benefits for Elderly Workers, employers may also consider purchasing supplementary employer liability or commercial insurance coverage to mitigate risks.
(4) It should be noted that, as a counterpart to the mandatory baseline protections, Elderly Workers are required to comply with the employer’s internal rules and regulations. Under PRC law, such rules must be adopted through a democratic consultation procedure involving all employees. To ensure enforceability, employers may consider requiring Elderly Workers to acknowledge and accept existing internal rules and regulations, and ensure Elderly Workers are also covered in the statutory democratic consultation procedure for future updates.
(5) Employers should closely monitor further legislative and judicial developments, particularly in areas that remain unclear, such as entitlement to statutory leave, the application of special working hour systems, and the detailed rules on work-related injury benefits, and adjust their practices accordingly.
