Are rehired retirees the same as over-age workers? Questions and answers on the Interim Provisions

Judicial Interpretation (II) on labor law has repealed the rule that persons already receiving retirement benefits are treated as being in a service relationship. With delayed retirement being implemented steadily, the Interim Provisions on the Protection of the Rights and Interests of Over-Age Workers (the "Over-Age Workers Provisions") will take effect on 1 July 2026. The Provisions continue, connect with and complete that repealed provision: starting from the definition of an over-age worker, anyone who is beyond the delayed statutory retirement age — whether or not retirement formalities have been completed — and who re-enters employment, performing paid work arranged by an employer and subject to the employer's labor management, falls within the Provisions. Receipt of retirement benefits is no longer the dividing line. Persons taking flexible early retirement are also covered. A rehired retiree is therefore not entirely the same as an over-age worker. I have set out the main questions and answers below for reference.

1. Are over-age workers in an employment relationship or a service relationship with the employer?

Article 2 of the Interim Provisions provides that where an employer engages a worker beyond the statutory retirement age (an "over-age worker") and the worker is subject to the employer's labor management and performs paid work arranged by the employer, these Provisions apply. Article 5 provides that the employer shall protect the over-age worker's basic rights to remuneration, rest and leave, work safety and health, and work-related injury protection. An employer engaging a worker who meets the employment characteristics described here must therefore protect those four basic entitlements, an approach understood in a way similar to the former "special employment relationship" or "non-standard employment relationship". Where those characteristics are absent, the relationship may instead be a service relationship or a contracting relationship.

2. Must a re-employment agreement be signed with an over-age worker?

Article 5 of the Interim Provisions provides that the employer and the over-age worker shall determine their rights and obligations in accordance with the principles of lawfulness, fairness, equality and voluntariness, consensus and good faith. Article 6 provides that the employer shall conclude a written work agreement with the over-age worker specifying the term, the work content, the place of work, working hours, rest and leave, remuneration, social insurance, labor protection, working conditions and protection against occupational hazards. Article 7 provides that the parties may by agreement vary the terms of the work agreement. Article 8 provides that the engagement ends when the term of the work agreement expires or the agreed work is completed, or when an agreed termination condition occurs or the parties agree to terminate the agreement. An agreement should therefore be signed to set out the parties' rights and obligations. It may be called a re-employment agreement or a work agreement; what matters is that it secures the four statutory entitlements, including remuneration, and the remaining terms may be agreed.

3. Is work-related injury insurance compulsory?

Article 15 of the Interim Provisions provides that the employer shall enrol the over-age worker in work-related injury insurance and pay the contributions, and that the individual does not contribute. Contributions are therefore compulsory once the Provisions take effect. The Provisions also state that the arrangements for work-related injury protection for over-age workers will be made separately, so the three lump-sum work-related injury benefits remain to be clarified.

4. Are over-age workers entitled to annual leave?

Article 9 of the Interim Provisions provides that the employer shall, in accordance with the Provisions of the State Council on Working Hours of Employees and the Measures for National Holidays and Memorial Days, arrange the working hours and rest and leave of over-age workers reasonably, and shall generally not arrange overtime for them. Because the annual leave rules are not made applicable to over-age workers, they have no statutory annual leave.

5. May an over-age employee be placed on comprehensive working hours or non-fixed working hours?

Yes, subject to approval by the local human resources and social security authorities. On the one hand, the Provisions state that over-age workers should in principle not work overtime, and in my view the intention is to protect them from excessive intensity, so special working hours systems are not appropriate. On the other hand, special working hours are set by post, and an enterprise may apply for them in accordance with its production and operational needs, provided that the over-age employee's rest and leave entitlements are not compromised. The legal basis is Article 3 of the Provisions of the State Council on Working Hours of Employees, under which employees work eight hours a day and 40 hours a week, and Article 5, under which other working and rest arrangements may be adopted in accordance with the relevant State provisions where the nature of the work or the characteristics of production prevents the standard system from being applied.

6. Are pension and medical insurance contributions still required?

Under Articles 16 and 17 of the Interim Provisions, where an over-age worker already receives basic pension benefits or basic medical insurance benefits as a retired employee and continues to work, those benefits are unaffected.

Where an over-age worker does not receive those benefits and chooses to continue contributing to basic pension insurance and basic medical insurance for retired employees, he or she may contribute in a personal capacity; alternatively, by agreement with the employer, the employer may contribute on his or her behalf in accordance with the rules, and the employee's own share is withheld and paid by the employer.

7. May an employer terminate when an employee reaches the statutory retirement age?

The Interim Provisions do not address this, so where an employee reaches the statutory retirement age the employer may terminate in accordance with the law.

8. Is compensation payable on ending a work agreement with an over-age worker?

The Interim Provisions do not address this. Apart from the four basic entitlements, the parties' rights and obligations follow their agreement, and where no compensation or damages are agreed the employer has no obligation to pay compensation or damages. Where the parties have agreed a breach clause or a clause on damages, the relevant provisions of the Civil Code apply.

In summary, the Over-Age Workers Provisions protect the basic labor rights of this group while accommodating the characteristics of flexible employment, and they apply both the Labor Law and the Civil Code. Rehiring after retirement is therefore no longer a simple arrangement: it is a new way of employing people.

Minton's note: to keep employment lawful, employers should, for workers who were rehired after retirement and who fall within the definition of over-age workers, sign or convert to an over-age work agreement as soon as possible, so as to avoid disputes.