Today, September 1, 2025, marks the official effective date of the new social insurance regulations. Even prior to this, many small and medium-sized business owners have consulted me, expressing concerns such as, “We are a small business. If we pay social insurance in full compliance with the law, we will operate at a loss every month.” They have asked how they can avoid making these payments for their employees.
My response to such inquiries has always been consistent: there is no legal way to avoid it. As the state has enacted this law, its clear intention is to mandate that businesses provide social insurance for their employees. Therefore, evasion is not a viable option. If an employee files a complaint or the authorities intervene, your business will face legal penalties.
That said, I recognize that some small and medium-sized businesses are indeed facing genuine financial difficulties. In these cases, I suggest first considering whether part-time workers can be utilized. If an individual’s daily working hours do not exceed four hours, they can be legally classified as a part-time employee, for whom the employer is not obligated to pay social insurance. Another option is to explore whether automation, artificial intelligence, or mechanized production could be implemented to reduce reliance on labor and associated costs.
I am Attorney Lyu. If you have any legal questions, please feel free to contact me.
Phone number: 18795428064