China
Refined methods concerning the calculation of Work-Related Injury Insurance Premiums in Shanghai
Impact date: 1 January 2026 – 31 December 2030 Pursuant to the Shanghai Work-Related Injury Insurance Implementation Measures (上海市工伤保险实施办法), in addition to paying work-related injury insurance premiums at a basic rate, a floating rate is also applied to Shanghai employers that have records of work-related injuries. The floating rate is determined based on factors such as the employer’s use of work related injury insurance funds and the incidence of work related injuries, and will be reviewed annually.
On 9 January 2026, the Shanghai Ministry of Human Resources and Social Security and the Shanghai Ministry of Finance jointly issued the Shanghai Work-Related Injury Insurance Floating Rate Management Measures (上海市工伤保险浮动费率管理办法, the “Measures”) to further refine the adjustment mechanism for work-related injury insurance rates and promote work-related injury prevention and rehabilitation. The Measures refine the upward and/or downward adjustment mechanisms in the calculation of the floating rate for various categories of industries, including the specific thresholds or scenarios under which adjustments may be triggered, special circumstances (e.g. failure to fulfil payment or reporting obligations or engagement in fraudulent activities) in which rate deductions are prohibited, and payments excluded from the calculation of employers’ work-related injury insurance premiums.
The Measures also elaborate on the allocation of liability in the context of dispatched workers.
Employer implications/action needed Given that the floating rate is pegged to employers’ past work-related injury records, employers should maintain a full record of work-related injuries (including payments excluded from premium calculation), ensure accuracy of filings, and clarify any disputed cases. Employers should also strengthen workplace safety management and accident prevention measures, and review compliance with payment obligations.
Employer risk Depending on the nature of the industry and the incidence of work-related injury accidents, employers may bear increased financial burdens resulting from an increased floating rate. If employers fail to fulfil their payment or reporting obligations or engage in fraudulent activities, they may also be disqualified from deductions in work-related injury insurance rates.
Supreme People’s Court clarifies conditions for advance payments out of the Basic Medical Insurance Fund
Impact date: 1 February 2026 Pursuant to the Social Insurance Law of the People’s Republic of China (中华人民共和国社会保险法) and the Interim Measures for Advance Payment by the Social Insurance Fund (社会保险基金先行支付暂行办法, the “Interim Measures”), where an individual participating in basic medical insurance (the “insured person") suffers an injury or illness caused by the tortious act of a third party who cannot be identified or fails to compensate for the portion of medical expenses for which it is legally responsible, the basic medical insurance fund shall make an advance payment upon (i) a written application with supporting information and (ii) a legal review by the social insurance agency (the “Agency”). Pursuant to the Interim Measures, the Agency may seek recourse for medical expenses paid in advance from (i) the work-related injury insurance fund, (ii) the employer (if it has not paid the work-related injury insurance premiums), (iii) the insured person (if he/she has obtained the medical expenses from a third party or the employer), or (iv) the responsible third party.
On 5 January 2026, the Supreme People’s Court promulgated the Official Reply of the Supreme People's Court on Issues Concerning the Application of Law on the Conditions for Applying for Advance Payment by the Basic Medical Insurance Fund (最高人民法院关于基本医疗保险基金先行支付申请条件法律适用问题的批复, the “Official Reply”). As per the Official Reply, the insured person’s statutory right to apply for an advance payment from the basic medical insurance fund is not affected by whether they have already paid the medical expenses themselves at the time of settlement. If the Agency rejects an application solely on the basis that the insured person has paid the expenses, the insured person may initiate court proceedings to seek an order for advance payment, and the court shall uphold the claim.
Employer implications/action needed By confirming that insured persons may apply for advance payment regardless of whether they have already paid the medical expenses themselves, the Official Reply in effect lowers the threshold for employees to file applications. It is foreseeable that more advance payment decisions may be issued by the Agency. Correspondingly, more recourse actions may be initiated, including against employers. It is important that employers pay work-related injury insurance premiums punctually.
Employer risk More recourse actions may be initiated against employers if they fail to pay work-related injury insurance premiums in a timely manner.
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