(Yicai) Aug. 14 -- As China gets ready to enforce stricter rules on social insurance contributions, several companies including McDonald’s have denied social media rumors that claim they hire retirees preferentially to bypass such payments.

McDonald’s has long hired retirees, generally aged from their early 50s up to 63, to supplement full-time staff, Yicai learned from the Chinese arm of the US fast food chain operator. McDonald’s strictly follows all legal requirements and government guidelines, with the retirees and other contract workers taken on receiving pay and private insurance fully in line with regulations, it said.

At Universal Studios Beijing, customer service staff said all job postings appear on its official website. A Yicai review of the listings found no retiree-specific roles. Positions are posted in categories such as food service, operations, and technology.

Reports about major companies such as McDonald’s and Universal Studios hiring post-retirement workers recently went viral on Chinese social media platform Weibo, sparking public debate.

According to a Supreme People’s Court decision issued on Aug. 1 and effective from Sept. 1, employers must make full social insurance contributions for all employees. Any agreement, formal or informal, to waive these payments will be deemed invalid.

The ruling has fueled concerns that any resulting higher labor costs will push employers toward more flexible staffing models, including hiring retirees, who typically accept lower wages and are exempt from social insurance contributions.

A coffee shop owner in Sichuan told Yicai that each of his three employees, all in their twenties, earn CNY3,500 (USD490) a month without social insurance coverage. The business, open for more than a decade, has never contributed to employees’ social insurance, even though staff were offered the option to split the cost equally with the employer after a year on the job.

“I don’t want to run the risk of being sued by staff for compensation,” the owner said. He plans to meet with employees before next month to propose either salary cuts to offset the insurance costs or changes to recruitment strategy. He calculates that after social insurance is deducted, monthly pay will drop to around CNY2,000 (USD280). “Whether they’ll accept this is still unclear,” he said. 

Asked if he might take on retirees, the owner said they could handle cleaning work but not specialized tasks such as coffee preparation. “It’s hard to imagine older workers learning coffee art,” he said, adding that recruiting retirees and part-timers is not a viable solution, as they cannot meet the daily demands of a cafe.

Yicai learned during on-site visits that restaurants, coffee shops, and hair salons favor young full-time staff, while other businesses such as supermarkets have less strict age requirements. Retirees usually take on jobs that younger people are reluctant to do, such as night shift work.

Protecting post-retirement workers involves more than just eliminating age discrimination, according to Li Chang'an, a researcher at the University of International Business and Economics’ Academy of China Open Economy Studies. It also requires clarification of their rights to work-injury insurance, he said.

Li noted that promoting lifelong learning, offering vocational skills training, and bringing older workers into the public employment service system are key to ensuring equal job opportunities.

In July, the Ministry of Human Resources and Social Security released draft regulations on safeguarding the basic rights of post-retirement workers, affirming their entitlement to fair pay, rest and vacation, workplace safety and health protections, and work-injury coverage when they return to the workforce.

Editor: Futura Costaglione