Old Huang signed a pledge waiving social insurance in order to receive an extra 300 yuan per month.
Twenty years later, at age 55, after the company moved its main business from Shanghai to Suzhou, his piecework income dropped sharply. He wanted to go back and claim social insurance, but the company produced that piece of paper and rejected him.
This was a case publicly disclosed this year by the Shanghai Second Intermediate People’s Court, where the judge took the trial into the industrial park. Old Huang said something very honest in court. When the company asked him to sign it, they said they would give him a 300-yuan monthly subsidy, but in reality the company should have been contributing at least 800 yuan a month for his social insurance. He truly did not understand; he only cared about the immediate money. Who could have imagined that it would cost him the rest of his life?
Why do I remember this piece of paper so clearly? When he signed it, it was cash; when he regretted it, it became leverage.
First, let’s make the rules clear. Last September, the Supreme People’s Court’s judicial interpretation (II) on labor dispute cases came into effect. Article 19 states very plainly that an agreement between an employer and an employee not to pay social insurance, or a unilateral pledge by the employee not to pay, is invalid. The employee may terminate the labor contract on this basis and may also request economic compensation. After the company makes back payments as required by the administrative authority, it may request the employee to return the social insurance fee subsidy previously paid.
In other words, a signature on paper counts as no signature at all in legal terms.
On November 1 this year, the second blow landed. The State Taxation Administration released the "National Tax Administrative Penalty Discretion Benchmarks (2026 Edition)," which took effect that same day. For the first time, unpaid social insurance contributions were included in the list of penalty matters and handled in the same category as tax arrears. If, after being ordered by the tax authorities to pay within a deadline, payment is still not made by the due date, a fine is imposed based on the amount overdue, starting at 1 times and up to 3 times.
The three tiers are set by amount and proportion.
If the overdue amount is less than 500,000 yuan, or between 500,000 and 5 million yuan but less than 30% of what should have been paid, the penalty is 1 times.
If it is between 500,000 and 5 million yuan and the proportion exceeds 30%, or if it is above 5 million yuan but the proportion is less than 30%, the penalty is 1 to 2 times.
If it is above 5 million yuan and the proportion exceeds 30%, or there are other serious circumstances, the penalty is 2 to 3 times.
My judgment is that what really keeps companies awake at night is not the multiplier of the fine, but the late payment surcharge that accumulates daily. Under Article 86 of the Social Insurance Law, a daily surcharge of 0.05% is imposed starting from the date of default. If it drags on for a year, that works out to an annualized rate of 18.25%. The fine hurts once; the surcharge hurts every day.
People on-chain should be familiar with this structure. After overcollateralized lending defaults, penalties likewise accumulate over time; the longer it drags on, the harder it is to repay. The difference is that on-chain default interest rates are hard-coded and automatically enforced, whereas this social insurance rule is locked in layer by layer through judicial interpretation and the penalty schedule. In the past, companies bet that workers did not understand the law; now that card no longer works.
How Old Huang’s case was ultimately decided is not included in the public reports. I’m not sure.
Only he knows how much that pledge is worth now.
$USDC $ETH $BTC #社保新规 #自愿放弃社保 #滞纳金 #税务处罚 #币安广场
Twenty years later, at age 55, after the company moved its main business from Shanghai to Suzhou, his piecework income dropped sharply. He wanted to go back and claim social insurance, but the company produced that piece of paper and rejected him.
This was a case publicly disclosed this year by the Shanghai Second Intermediate People’s Court, where the judge took the trial into the industrial park. Old Huang said something very honest in court. When the company asked him to sign it, they said they would give him a 300-yuan monthly subsidy, but in reality the company should have been contributing at least 800 yuan a month for his social insurance. He truly did not understand; he only cared about the immediate money. Who could have imagined that it would cost him the rest of his life?
Why do I remember this piece of paper so clearly? When he signed it, it was cash; when he regretted it, it became leverage.
First, let’s make the rules clear. Last September, the Supreme People’s Court’s judicial interpretation (II) on labor dispute cases came into effect. Article 19 states very plainly that an agreement between an employer and an employee not to pay social insurance, or a unilateral pledge by the employee not to pay, is invalid. The employee may terminate the labor contract on this basis and may also request economic compensation. After the company makes back payments as required by the administrative authority, it may request the employee to return the social insurance fee subsidy previously paid.
In other words, a signature on paper counts as no signature at all in legal terms.
On November 1 this year, the second blow landed. The State Taxation Administration released the "National Tax Administrative Penalty Discretion Benchmarks (2026 Edition)," which took effect that same day. For the first time, unpaid social insurance contributions were included in the list of penalty matters and handled in the same category as tax arrears. If, after being ordered by the tax authorities to pay within a deadline, payment is still not made by the due date, a fine is imposed based on the amount overdue, starting at 1 times and up to 3 times.
The three tiers are set by amount and proportion.
If the overdue amount is less than 500,000 yuan, or between 500,000 and 5 million yuan but less than 30% of what should have been paid, the penalty is 1 times.
If it is between 500,000 and 5 million yuan and the proportion exceeds 30%, or if it is above 5 million yuan but the proportion is less than 30%, the penalty is 1 to 2 times.
If it is above 5 million yuan and the proportion exceeds 30%, or there are other serious circumstances, the penalty is 2 to 3 times.
My judgment is that what really keeps companies awake at night is not the multiplier of the fine, but the late payment surcharge that accumulates daily. Under Article 86 of the Social Insurance Law, a daily surcharge of 0.05% is imposed starting from the date of default. If it drags on for a year, that works out to an annualized rate of 18.25%. The fine hurts once; the surcharge hurts every day.
People on-chain should be familiar with this structure. After overcollateralized lending defaults, penalties likewise accumulate over time; the longer it drags on, the harder it is to repay. The difference is that on-chain default interest rates are hard-coded and automatically enforced, whereas this social insurance rule is locked in layer by layer through judicial interpretation and the penalty schedule. In the past, companies bet that workers did not understand the law; now that card no longer works.
How Old Huang’s case was ultimately decided is not included in the public reports. I’m not sure.
Only he knows how much that pledge is worth now.
$USDC $ETH $BTC #社保新规 #自愿放弃社保 #滞纳金 #税务处罚 #币安广场