Perspective | Determining Overage Employment Relationships Under the New Regulations
Published:
2025-09-29
As China’s population aging accelerates and the country advances its policies on delaying retirement, the number of employed individuals who have already surpassed the statutory retirement age—typically 60 for men and 55 or 50 for women—continues to grow, sparking increasing controversy and disputes. Determining the nature of the employment relationship between employers and these workers, as well as ensuring their rights and benefits, has become a central issue in practical applications. Starting from September 1, 2025, the Supreme People’s Court’s "Interpretation on Applying Laws in Handling Labor Dispute Cases (II)"—hereafter referred to as the "New Interpretation"—will officially come into effect. Concurrently, the Ministry of Human Resources and Social Security, along with other relevant departments, has released the "Provisional Measures for Protecting the Basic Rights and Interests of Older Workers (Draft for Public Comment)"—hereafter referred to as the "Provisional Measures"—providing a framework for addressing these critical issues. This article, drawing on the newly issued judicial interpretation and policy guidelines, explores and analyzes how to determine the nature of employment relationships involving older workers.
As China’s population aging accelerates and the country advances its policies on delaying retirement, the number of employed individuals who have already surpassed the statutory retirement age—typically 60 for men and 55 or 50 for women—continues to grow, sparking increasing controversy and disputes. Determining the nature of the employment relationship between employers and these workers, as well as ensuring their rights and benefits, has become a central issue in practical applications. Starting from September 1, 2025, the Supreme People’s Court’s "Interpretation on Applying Laws in Handling Labor Dispute Cases (II)" (hereafter referred to as the "New Interpretation") will officially come into effect. Concurrently, the Ministry of Human Resources and Social Security, along with other relevant departments, has released the "Provisional Measures for Protecting the Basic Rights and Interests of Older Workers" (Draft for Public Comment), providing a framework for addressing the aforementioned challenges. This article, drawing on the newly issued judicial interpretation and policy guidelines, explores and analyzes how to determine the nature of employment relationships involving older workers.
I. The Criteria for Determining Employment Relationships Involving Overage Workers in Traditional Judicial Practice
According to Article 44 of the "Labor Contract Law": "When a worker begins to legally enjoy basic pension insurance benefits, the labor contract shall be terminated." Furthermore, Article 32 of the "Interpretation (I) by the Supreme People's Court on Applying Laws in Handling Labor Dispute Cases" explicitly states: "If an employer files a lawsuit against personnel it has hired who are already legally enjoying pension insurance benefits or receiving retirement pensions, the people's court shall handle the case as a service relationship." Therefore, prior to the introduction of the new regulations, for retired individuals rehired after enjoying pension benefits, both legal provisions and judicial interpretations clearly defined their relationship with the employer as a service relationship—a definition that has generally faced little controversy in judicial practice.
However, in judicial practice, there is ongoing debate regarding individuals who have reached the statutory retirement age but are unable to receive pension benefits due to insufficient years of contributions or other reasons. One view holds that, according to the aforementioned regulations and the Supreme Court's response, such workers—having not yet enjoyed basic pension insurance benefits—are still in an employment relationship with their employers (e.g., Case No. (2021) Gui 06 Min Zhong 569). On the other hand, another perspective argues that workers who have attained the statutory retirement age are instead linked to their employers through a service contract relationship (e.g., Case No. (2020) Lu Min Shen 1429). The reasoning behind this stance is that Article 21 of the Implementation Regulations of the Labor Contract Law clearly states: "When a worker reaches the statutory retirement age, the labor contract shall be terminated," as supported by responses from the Ministry of Human Resources and Social Security. Moreover, these Implementation Regulations, issued as an administrative regulation by the State Council, explicitly authorize the termination of labor contracts upon reaching the statutory retirement age, a provision that aligns with, rather than contradicts, the Labor Contract Law itself.
II. Refinements and Adjustments to the Recognition of Employment Relationships Involving Overage Workers under the New Regulations
As the policy of delaying retirement progresses and the group of older workers becomes increasingly diverse, traditional criteria for determining employment relationships are gradually revealing their limitations. For instance, categorizing all such workers as being in an employment relationship would significantly increase labor costs for employers. Conversely, completely excluding retirees rehired after retirement from the scope of employment relationships might leave them without access to essential labor rights—such as workers' compensation or overtime pay—contradicting the labor law's core principle of "safeguarding the legitimate rights and interests of workers." The issuance of the new interpretation and the draft for public consultation is precisely aimed at addressing this pressing real-world need.
The new interpretation has invalidated Article 32, Paragraph 1 of the Supreme People's Court's "Interpretation on Applying Laws in Handling Labor Dispute Cases (II)," which stated: "If a dispute arises between an employer and a worker it has hired who is already legally entitled to pension benefits or receives a retirement pension, and the employer files a lawsuit with the people's court, the court shall treat the relationship as one involving labor services." However, this does not mean that hiring workers over the standard retirement age automatically establishes a labor relationship. In fact, the new interpretation does not explicitly negate the traditional rule that "enjoying pension benefits terminates the employment relationship." In my view, following the issuance of the new interpretation, determining the nature of the employment relationship for older workers who are already receiving pension benefits should involve a case-by-case assessment, taking into account substantive factors such as the manner in which wages are paid, the actual working hours, whether the worker is subject to the employer's attendance management, and whether they comply with the employer's internal rules and regulations.
The "Provisional Regulations," meanwhile, introduce innovative provisions regarding the employment relationship of older workers. Departing from the conventional binary distinction between labor and service relationships, the regulations adopt a "list of rights" approach to outline the fundamental entitlements enjoyed by older workers. Specifically, regardless of whether the relationship established between the employer and the worker is classified as a labor or service arrangement, employers are required to ensure that older workers receive the following protections: 1. Remuneration no lower than the local minimum wage standard; 2. Compliance with nationally mandated working hours, along with statutory rest periods and holidays; 3. Compensation in cases of work-related injuries, based on the standards outlined in the "Regulations on Work Injury Insurance"; 4. Occupational safety and health safeguards. Article 20 of the "Provisional Regulations" explicitly states: "Any disputes arising from the labor remuneration, rest and vacation policies, occupational safety and health measures, or work injury protection clearly stipulated herein shall be handled in accordance with the 'People's Republic of China Labor Dispute Mediation and Arbitration Law.'" This provision essentially sets a "minimum threshold" for safeguarding the rights of older workers, ensuring that their benefits are not undermined due to ambiguities over the legal classification of their employment status.
III. Compliance Recommendations for Employers Under the New Regulations
1. Clearly define the nature of the employment relationship: When hiring retirees who are already receiving pension benefits, it is necessary to assess whether a labor relationship exists based on factors such as the nature of their work and the management approach. If a labor relationship is established, a formal employment contract must be signed, and workers' compensation insurance should be provided for them. However, if the arrangement is classified as a service relationship, a written service contract must be concluded, clearly outlining terms such as job responsibilities, compensation rates, and liabilities related to workplace injuries.
2. Purchase supplementary insurance: Regardless of the nature of the employment relationship, it is recommended to purchase insurance for older workers. Supplementary Workers' Compensation Insurance Or business accident insurance, which reduces the risk of compensation for work-related injuries.
3. Safeguarding the Bottom Line of Rights and Interests: Employers, whether entering into service contracts or labor contracts with workers who have exceeded the standard retirement age, must ensure that employees' wages, working hours, and other conditions meet or exceed statutory standards, thereby avoiding the risk of administrative penalties or the obligation to pay economic compensation.
IV. Conclusion
The introduction of the new regulations marks a shift in China's approach to safeguarding the rights of older workers—from a "simple dichotomy" toward "tiered protection." This move not only respects employers' flexibility in managing their workforce but also ensures that older workers are provided with essential minimum protections. For older individuals, these enhanced safeguards will extend beyond the traditional framework of labor relations. Employers and employees alike must stay informed about these regulatory changes, ensuring compliance while fostering positive, mutually beneficial interactions in the workplace. Together, they can help advance the development and effective implementation of labor laws tailored to an aging society.
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