Increased scrutiny of businesses in China that evade their social insurance obligations looks set to further boost the employment of retirees, prompting widespread concerns as a record number of university graduates tries to find work.
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It all came to a head recently when recruitment notices put out by the McDonald’s fast food chain, which has been employing retirees for years, sparked an emotional response on Chinese social media platforms.
“The logic behind it is simple – hiring retirees means companies don’t have to pay social insurance contributions,” one user wrote on the Weibo microblogging platform.
Another complained: “If this becomes widespread, elderly people can have double pay, but opportunities for younger people will shrink.”
A Supreme People’s Court judicial interpretation released early this month will invalidate any agreements between employers and employees to forgo social insurance contributions. It will come into effect at the start of next month, and businesses that fail to comply could face legal penalties and demands for retroactive payment.
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Strict collection of social security contributions, which go into funds covering areas including the provision of pensions, housing loans and medical, maternity and unemployment insurance, could prove vital in tackling the country’s pension crisis.