Legal News

[Labor] Information on Additional Changes to the Revised Social Insurance Law

2024/07/25

Following the news on the Social Insurance Law of 2024 distributed on July 4, 2024, we will now guide you through the noteworthy changes regarding social insurance enrollees and the salaries on which social insurance premiums are paid in relation to the revised law.

1. Who is eligible for social insurance
The revised law expands eligibility for social insurance coverage to include workers who work on a flex-time basis (“part-time workers”).

・Work part-time under a fixed-term or indefinite-term labor contract of one month or longer.
・Their monthly salary is equal to or higher than the lower limit of the social insurance premium calculation standard.

Companies employing part-time workers are required to complete registration procedures for employees who will become newly enrolled in social insurance on July 1, 2025.

2. Salary as the basis for social insurance premium payment
According to the current 2014 Social Insurance Law, the “salary that serves as the basis for the payment of social insurance contributions” includes
(i) Base salary
(ii) Salary and benefits
(iii) Other additional payments as provided for in the Labor Law.

In particular, the following allowances and additional payments must be included when calculating social insurance premiums

・Salary allowances that take into account working conditions, complexity of the job, living conditions, etc., and are not included in the basic salary agreed upon in the labor contract
・A certain amount of additional payment that is paid periodically in addition to the salary agreed upon in the labor contract.

On the other hand, the following allowances and additional payments are not covered by social insurance

・Salaries and benefits that are paid as a result of the worker’s work process or job performance.
・Additional payments of an indefinite amount paid periodically or irregularly in addition to the salary under the labor contract, based on the results of the worker’s job performance.

Under the 2024 Social Insurance Law, “salary as the basis for social insurance payments” includes
(i) Base salary
(ii) salary allowances; and
(iii) Other additional payments agreed to be paid on a regular and stable basis for each pay period.

The Social Insurance Law of 2024 will enter into force on July 1, 2025. In preparation for the revision, please re-check your company regulations and labor contracts and update them as necessary.

 

Reference: Social Insurance Law of 2024