Delayed retirement is really coming. 

On March 11, 2021, the 14th Five Year Plan for National Economic and Social Development of the People's Republic of China and the Outline of the Vision and Objectives for 2035, adopted at the Fourth Session of the 13th National People's Congress, clearly stated that the legal retirement age should be gradually postponed in accordance with the principles of "small step adjustment, flexible implementation, classified promotion, and overall planning.". 

On June 30, 2021, the head of the Planning and Finance Department of the Ministry of Human Resources and Social Security answered reporters' questions about the "14th Five Year Plan" for the development of human resources and social security, proposing to steadily implement a gradual delay in the legal retirement age. 

As of August 2021, all 31 provinces, autonomous regions, and municipalities across the country have held working meetings to solicit opinions on the reform of gradually delaying the legal retirement age. 

On February 21, 2022, the State Council issued the "Notice on Printing and Distributing the" 14th Five Year Plan "National Plan for the Development of Ageing Undertakings and the Elderly Care Service System.". The notice makes a comprehensive plan for China's elderly care undertakings and services during the "14th Five Year Plan" period, and once again mentions "implementing a gradual delay in the legal retirement age.". 

Delayed retirement is getting closer. Many people predict that 2022 will be the year for the implementation of the delayed retirement pilot. 

1、 Current effective retirement policy

According to the still effective "Interim Measures of the State Council on the Placement of Old, Weak, Sick, and Disabled Cadres" and "Interim Measures of the State Council on the Retirement and Resignation of Workers" (Guo Fa [1978] No. 104), the current legal retirement age in China is: male at least 60 years old, female cadres (management posts) at least 55 years old, and female employees (non management posts) at least 50 years old. 

The above retirement age has been implemented since the 1950s and has not been adjusted for a long time. The policy at that time fully considered factors such as labor conditions, life expectancy, and physiological characteristics of men and women, and played a positive role in protecting the labor rights and mental health of employees. 

With the economic and social development of China, the prolongation of life expectancy, and the aging of the population, the current retirement age is significantly lower, with significant differences between male and female retirement ages, insufficient utilization of human resources, declining dependency ratios for pension insurance, and increasing pressure on pension fund payments. The currently implemented retirement age is no longer suitable for China's national conditions, In recent years, there has been a growing voice for the introduction of a delayed retirement policy. 

2、 Current policies and practical practices for delayed retirement of enterprise employees

Although the country has not yet introduced a uniformly applicable deferred retirement plan, first-tier cities such as Beijing, Shanghai, and Shenzhen have long handled deferred retirement for enterprise employees. This is consistent with the proposed delayed retirement policy of the country. 

1. Delayed retirement of enterprise personnel in Beijing

Article 15 of the Notice on Issues Related to the Implementation of the Beijing Basic Endowment Insurance Regulations (JLSHYF [2007] No. 29) stipulates that: 

"If an employee has met the monthly basic pension requirements specified in Order 183 and continues to be employed due to work needs, the enterprise and the employee should sign a written agreement specifying the retention period and related matters, and report to the municipal or district/county labor and social security administrative department for filing (unless otherwise specified)." And keep the recorded written agreement with the social insurance agency. "During the retention period, enterprises and employees should continue to pay basic old-age insurance premiums in accordance with Order 183, and their contributions should be included in the employee's personal account and calculated according to regulations. At the end of the retention period, payment should be stopped and retirement procedures should be handled in a timely manner.". 

Article 3 of the Notice of Beijing Municipality on Issues Related to Extending the Payment of Social Insurance Premiums by Insured Persons (JRSSYF [2013] No. 290) stipulates that: 

"If an insured person who meets the conditions for extending payment in this city continues to be retained by the unit due to work needs, the enterprise and the employee should sign a written agreement specifying the retention time and related matters, report to the municipal or district/county human and social security administrative department for filing, and retain the documented written agreement with the social insurance agency. During the retention period, the enterprise and the employee should continue to pay social insurance according to the regulations of this city." There will be insurance premiums. "If the payment period for basic old-age insurance and basic medical insurance is still less than the prescribed period after the end of unit retention, the payment may be extended in accordance with this notice." 

According to the above regulations, since 2007, Beijing has handled delayed retirement for enterprise employees. The enterprise and employees sign a written agreement on the retention time and related matters and report to the social security department for filing. During the retention period, social insurance premiums are paid and the payment period is calculated in accordance with the "Beijing Basic Pension Insurance Regulations.". 

2. Delayed Retirement of Shanghai Enterprise Personnel

Shanghai is a leading city in legislation and law enforcement regarding delayed retirement of enterprise personnel. 

On September 27, 2010, the Shanghai Municipal Bureau of Human Resources and Social Security issued the "Trial Opinions on Flexible Delays in Applying for Basic Pensions by Various Talents in Enterprises in this City" (HRSHYF (2010) No. 47) (the "Trial Opinions"). The details are as follows: 

About applicable scope objects. According to the "Trial Implementation Opinions", "Among the enterprises participating in urban old-age insurance in this city, those with professional and technical qualifications, skilled personnel with technicians and senior technician certificates, and other personnel required by the enterprise have reached the legal retirement age and meet the conditions for receiving basic pensions in this city. If the enterprise needs to work, I am healthy and able to adhere to normal work. Upon application, I will negotiate with the enterprise." "After receiving the basic pension, you can delay applying for it." 

Regarding the delay period. The "Trial Implementation Opinion" stipulates that "the age for delaying the application for basic pension is generally not more than 65 years old for males and 60 years old for females.". 

Regarding social security contributions. According to the "Trial Implementation Opinions", "Enterprises and individuals shall pay basic old-age insurance premiums and work-related injury insurance premiums according to regulations, and no longer pay medical, unemployment, and maternity insurance premiums." 

Regarding social security benefits during the delay period. According to the "Trial Implementation Opinions", the medical insurance benefits shall be implemented in accordance with the provisions on medical insurance benefits for those who have reached the legal retirement age and received basic pensions. If an industrial injury accident occurs during the delay period, the employee shall enjoy corresponding industrial injury insurance benefits in accordance with the relevant regulations of this city on industrial injury insurance. In the event of death due to illness or non work related causes during the delay period, the funeral subsidy shall be implemented in accordance with the relevant provisions of this city after the death of enterprise retirees due to illness or non work related causes, and the required expenses shall be paid by the city's urban basic old-age insurance pooling fund. 

3. Delayed retirement of enterprise personnel in Shenzhen

Following the introduction of the "flexible deferred pension application" policy in Shanghai, Shenzhen has also made relevant explorations. According to the "Regulations on Social Pension Insurance in the Shenzhen Special Economic Zone (Draft for Comments)", participants who meet the conditions for receiving basic pensions on a monthly basis can delay receiving pension insurance benefits after consultation with the employer, and the employer and individual continue to pay pension insurance premiums, The years of continuous payment of pension insurance premiums are calculated as the payment years and included in the calculation of the payment index. 

The relevant person in charge of the internal departments and committees of the Standing Committee of the Municipal People's Congress stated that the above provisions draw on the experience of Shanghai, which can enable talents to continue to make contributions, on the one hand, and also enable them to improve their treatment level through overpayment of regular contributions. This provision gives employees and enterprises greater options, which is conducive to the continued contribution of talents to society. 

Article 28 of the Regulations of the Shenzhen Special Economic Zone on Social Endowment Insurance, which was officially adopted on October 30, 2012, stipulates that if an insured person who meets the conditions for receiving basic pensions on a monthly basis has not applied for and continues to pay pension insurance premiums, the number of years for continuing to pay pension insurance premiums is calculated as the number of years of payment, and is included in the calculation of the payment index. 

After further understanding from the social security department in Shenzhen, we have learned that after reaching the legal retirement age, enterprise personnel can continue to retain and pay social security. Employers should declare in the social security system in advance, and only pay pension insurance and medical insurance during the delayed retirement period. The payment calculation method and treatment for delayed retirees and regular employees are the same. 

4. Suzhou Enterprise Staff Delayed Retirement

Currently, Jiangsu Province has issued regulations on delaying retirement. On January 29, 2022, the Human Resources and Social Security Department of Jiangsu Province issued Article 13 (4) of the "Implementation Measures for Basic Endowment Insurance for Enterprise Employees in Jiangsu Province" (hereinafter referred to as the "Implementation Measures"), "Upon my application and the consent of the employer, and upon filing with the human resources and social security administrative department, the insured person may postpone retirement for a minimum period of not less than one year.". This measure was implemented on March 1, 2022. We have been informed that the implementation of the above measures is currently suspended due to the lack of specific operational rules. 

5. About work injury insurance

Article 2 of the Opinions of the Ministry of Human Resources and Social Security on Several Issues Concerning the Implementation of the Regulations on Industrial Injury Insurance (II) (Human Resources and Social Security Ministry [2016] No. 29) stipulates that those who have reached or exceeded the statutory retirement age, but have not gone through retirement procedures or have not enjoyed the basic old-age insurance benefits for urban employees according to law, and continue to suffer from accident injuries or occupational diseases during their employment with the original employer, The employer shall bear the liability for industrial injury insurance according to law. If an employer recruits a person who has reached or exceeded the legal retirement age or has received basic old-age insurance benefits for urban employees, and has suffered accident injuries or occupational diseases due to work reasons during the employment period, if the employer has paid the industrial injury insurance premiums for them by way of project insurance, etc., the Regulations on Industrial Injury Insurance shall apply. 

Article 4 of the Notice on Several Issues Concerning the Implementation of the Shanghai Measures for the Implementation of Industrial Injury Insurance (HRSFF (2014) No. 36) stipulates that employees who reach the statutory retirement age have not gone through the procedures for receiving basic old-age insurance benefits on a monthly basis, or who do not meet the conditions for receiving basic old-age insurance benefits on a monthly basis, and who continue to work in the original employer and suffer accident injuries, The applicant may apply to the district/county human rights and social security bureau where the unit is registered for recognition of industrial injury. 

On December 31, 2020, the Department of Human Resources and Social Security of Guangdong Province, in conjunction with other institutions, issued Article 2 of the "Measures on the Participation of Specific Personnel such as Workers above the Legal Retirement Age in Work Injury Insurance for Employers (for Trial Implementation)", which stipulates that employers may, in accordance with the provisions of these Measures, participate in individual work injury insurance and pay work injury insurance premiums for specific personnel they use. Specific personnel include those who work in an employment unit and exceed the legal retirement age (including those who have enjoyed and have not enjoyed the basic old-age insurance benefits for government agencies, institutions, or urban employees). 

According to the above regulations, we believe that if an enterprise hires employees who have reached the legal retirement age, it should pay industrial injury insurance for such employees on the premise of complying with local social security payment policies. If the enterprise fails to pay industrial injury insurance for such employees, and similar industrial accidents occur, the enterprise must bear the employer's liability for compensation in accordance with the relevant provisions of the Civil Code. In such cases, the enterprise should purchase additional commercial insurance to mitigate liability. 

3、 The nature of employment during deferred retirement

The current legal retirement age in China is significantly different from that in developed countries in Europe and the United States. Many enterprises, especially foreign-funded enterprises, hope to retain outstanding talents who have reached the retirement age. Therefore, we also analyze the employment nature of delayed retirees in order for employers to formulate appropriate countermeasures. 

1. Labor Contract Termination Criteria

Article 44 (2) of the Labor Contract Law stipulates that when a worker begins to enjoy basic old-age insurance benefits according to law, the labor contract is terminated. 

Article 21 of the Regulations for the Implementation of the Labor Contract Law stipulates that when a worker reaches the legal retirement age, the labor contract is terminated. 

The reply of the Civil First Division of the Supreme People's Court on the determination criteria for the termination of labor relations between workers (including migrant workers) who have reached or exceeded the statutory retirement age and the employing unit ([2015] Minyitazi No. 6) is as follows: For the termination of labor contract relations between workers (including migrant workers) who have reached or exceeded the statutory retirement age and the employing unit, The standard should be whether the worker enjoys pension insurance benefits or receives a pension. 

In its Reply to Recommendation No. 4419 of the Fourth Session of the Twelfth National People's Congress (RSJZ [2016] No. 69), the Ministry of Human Resources and Social Security believes that Article 21 of the Regulations for the Implementation of the Labor Contract Law stipulates that if a worker reaches the legal retirement age, the labor contract shall be terminated. According to the Regulations for the Implementation of the Labor Contract Law, as long as a worker reaches the legal retirement age, regardless of whether he or she enjoys pension insurance benefits, the labor contract will naturally terminate. 

It can be seen that there are different provisions on whether labor contracts should be terminated according to whether the worker reaches the legal retirement age or enjoys pension insurance benefits. 

2. The nature of employment during employees' delayed retirement

Article 32 of the Interpretation of the Supreme People's Court on Legal Issues Applicable to the Trial of Labor Dispute Cases (I) stipulates that employment disputes arising from personnel who have reached the legal retirement age and have legally enjoyed pension insurance benefits or received pensions shall be handled as labor relations. There is currently no objection to this. However, for those who have reached the legal retirement age but have not enjoyed pension insurance benefits or received retirement benefits according to law, including those who have delayed retirement, the employment disputes that arise are labor relations and labor relations, which are highly controversial. 

On May 7, 2014, the Beijing High Court and the Beijing Labor Dispute Arbitration Commission issued Article 12 of the Minutes of the Seminar on the Application of Law in Labor Dispute Cases (II): For personnel who have reached the legal retirement age, the employment relationship between them and their original employer or new employer shall be treated as a labor relationship. 

The Guidelines for the Trial of Labor Dispute Cases by the Shanghai Higher People's Court (I) (2013) stipulates that for workers who have started to enjoy basic old-age benefits in accordance with the law, the provisions of Judicial Interpretation III should be strictly followed. Disputes between workers and employers should be handled according to labor relations; "For those who have reached the statutory retirement age but continue to work without terminating their labor relationship with the employer, and fail to handle retirement procedures according to regulations, they shall be treated as labor relations.". 

On July 19, 2017, Article 20 of the "Answers to Difficult Issues in the Trial of Labor Dispute Cases" (repealed) issued by the Guangdong Provincial High Court stipulates that the relationship between persons of retirement age and the employer is a labor relationship. 

According to the Notice on Printing and Distributing the Minutes of the Seminar on Difficult Issues in Labor and Personnel Disputes in Jiangsu Province (SLZW [2017] No. 1) issued by the Jiangsu Labor and Personnel Dispute Arbitration Commission, employment disputes between employers and employees who have legally enjoyed basic pension insurance benefits or received retirement benefits shall be handled as labor relations. If a labor dispute arises between an employer and a person who has reached or exceeded the legal retirement age but has not enjoyed basic pension insurance benefits or received pension benefits, and the employment situation between the two parties conforms to the characteristics of the labor relationship, it shall be handled as a special case of the labor relationship. 

It can be seen that the relevant courts have inconsistent standards for this determination. Beijing and Guangdong courts (including Shenzhen) believe that the employment relationship after an employee reaches the statutory retirement age is treated as a labor relationship, while Shanghai and Jiangsu courts (including Suzhou) stipulate that the employment relationship where an employee reaches the statutory retirement age without going through retirement procedures or enjoying basic pension insurance benefits is a labor relationship. 

3. Related Cases

(1) According to the Civil Judgment No. 2949 (2018) issued by the First Intermediate People's Court of Shanghai, the court holds that Article 44 of the Labor Contract Law of the People's Republic of China stipulates that if a worker begins to enjoy basic old-age insurance benefits according to law, the labor contract shall be terminated; Article 21 of the "Regulations for the Implementation of the Labor Contract Law of the People's Republic of China" stipulates that when a worker reaches the retirement age, the labor contract is terminated. The employer may terminate the labor contract in accordance with the aforementioned provisions. 

(2) According to the first instance civil judgment on the labor contract dispute between Wu Zhengrong and Yumafang Real Estate Co., Ltd. (Case No.: (2021) Jing 0117 Min Chu No. 6043), the court held that after the worker reached the retirement age, he did not enjoy pension insurance benefits or receive a pension due to his own reasons, but continued to work in the employer, and was managed by the employer, which met the substantive requirements for establishing a labor relationship, Both parties still belong to a labor relationship. Specifically, in this case, the employer and the employee have reached an agreement to handle delayed retirement. During the delayed retirement period, the employment relationship belongs to a labor relationship. 

(3) According to the second instance civil ruling on labor disputes between Zhang Yujun and Beijing Mingyue Cleaning Service Co., Ltd. [Case No.: (2021) Jing 01 Min Zhong No. 10801], the court held that Article 21 of the Regulations for the Implementation of the Labor Contract Law of the People's Republic of China should apply, that is, if the worker reaches the legal retirement age, the labor contract shall be terminated. According to the judicial interpretation of the Supreme Court, if an employer has a labor dispute with a person who has legally enjoyed pension insurance benefits or received pension benefits, and brings a lawsuit to the people's court, the people's court shall handle it as a labor relationship. This article is about the determination of the legal relationship in disputes over personnel who have already enjoyed pension insurance benefits or received pension benefits. It cannot be inferred from this fact that although workers have not started to enjoy basic pension insurance benefits according to law but have reached the legal retirement age, they constitute a labor relationship with the employer. 

(4) According to the Civil Judgment of Guangzhou Jinli Cleaning Service Co., Ltd. and Chen Mei in the retrial of the labor dispute civil case [Case No.: (2018) Yue Min Zai No. 100], the court believes that if it is indeed necessary to delay the retirement age and give play to the surplus heat of elderly workers, it should also be resolved by revising the retirement age regulations for workers and stipulating the approval of relevant labor laws and regulations, It is not suitable for the judiciary to directly determine and comprehensively adjust labor relations. 

(5) According to the Civil Second Instance Decision on the Labor Contract Dispute between Wang Ruiyun and Tianyuan Hotel in Meijiang District, Meizhou City [Case No.: (2019) Yue 14 Min Zhong No. 1387], the court held that after the worker reached the legal retirement age, he still worked in the employer and did not enjoy basic pension insurance treatment, and there was still a labor relationship between the two parties, The court supported the workers' claim for economic compensation for the termination of labor relations and double wages during the period when no labor contract was signed. 

According to the above court precedents, combined with other cases, the court is more inclined to believe that the labor contract is terminated when the worker reaches the legal retirement age; After the worker reaches the legal retirement age, if the worker still works at the employer and meets the characteristics of the labor contract, the employment relationship belongs to a labor relationship; If both parties negotiate to postpone retirement after the worker reaches the legal retirement age, the employment relationship belongs to a labor relationship. 

4、 Practical recommendations

Regarding deferred retirement, some local human resources and social security departments have different regulations. Due to the lack of upper level legislation, judicial authorities in various regions have different standards of adjudication in handling disputes over delayed employment of retirees. For employees who delay retirement, we try to summarize the following practical methods: 

1. If the company wishes to continue to have a labor relationship with delayed retirees, it can proceed as follows: 

(1) Go through the formalities for delayed retirement filing with the human resources and social security department; 

(2) Both parties shall sign a separate agreement for filing, the content of which may be consistent with the original labor contract, but the retention period shall comply with local regulations; 

(3) Pay social insurance for the delayed retirement period according to the regulations of the human resources and social security department; 

(4) If some types of insurance cannot be paid, additional arrangements can be made through commercial insurance. 

2. For personnel who do not wish to apply for delayed retirement, the following procedures can be followed: 

(1) Be careful not to sign labor contracts that exceed the legal retirement age; 

(2) When an employee reaches the legal retirement age, promptly handle the termination of the labor contract, terminate the labor employment relationship between both parties, and do not form a de facto labor relationship; 

(3) Timely handle retirement procedures as required by the human resources and social security department. 

3. For employees who have reached the statutory retirement age, the company can also sign a labor agreement to clarify that the employee has reached the statutory retirement age; It is clearly not applicable to the adjustment of labor law, but regulated according to ordinary contractual relationships.