Haidilao Guangzhou Stores Respond to Claims About Six-Month Delay in Social Insurance Coverage

Deep News
Aug 19

Recent reports suggest that new Haidilao employees must start as "flexible workers," with Guangzhou Haidilao stores indicating that regional policies currently prevent direct hiring of formal employees.

Recent online discussions have emerged regarding Haidilao's employment practices, with users claiming that new hires must work as "flexible workers" (part-time or contract workers) without receiving standard social insurance benefits known as "Five Insurances and One Fund."

**No Social Insurance Benefits Initially?**

A user claiming to be a returning Haidilao employee revealed that current recruitment only offers flexible worker positions without insurance coverage. "Now they only hire outsourced flexible workers, no more 'Five Insurances and One Fund,'" the user stated. This person rejoined in March and after five months, the company still hasn't provided social insurance coverage. During their previous employment, benefits were provided after three months.

Other users reported that since March, Haidilao has implemented a "new flexible worker" system, classified as non-full-time employment. New employees must start as flexible workers without social insurance benefits, with different treatment compared to formal employees. Even though work content and hours are similar to full-time positions, employees must "wait for conversion to permanent status" to receive social insurance benefits.

A recent graduate who interviewed for Haidilao's management trainee program reported receiving notification about either "waiting for uncertain trainee positions" or converting to "regular employee" status. After choosing the latter, they received a "flexible employment" QR code for the "new flexible worker" program without social insurance coverage.

Some self-identified Haidilao employees posted about being notified to sign outsourced contracts without social insurance benefits through "Weihai" (Weihai Recruitment platform), a Haidilao-affiliated service provider.

Visits to multiple Guangzhou Haidilao locations revealed that one store manager explicitly stated that regional policies currently prohibit direct hiring of formal employees, requiring all new hires to start as non-full-time workers before conversion to permanent status.

**Six Months Without Social Insurance?**

Faced with various employment categories - new flexible workers, flexible workers, outsourced employees, and formal employees - the terminology can be confusing.

Haidilao's public relations department responded that the company has long employed both full-time and flexible employment approaches, following national employment policies and guidelines while legally providing social insurance for full-time employees. They stated that formal employees and various flexible employment forms are complementary, with both being actively recruited through platforms like Weihai Recruitment.

On the Weihai Recruitment platform, Guangzhou Haidilao is advertising "full-time positions" with salaries ranging from 5,000 to 8,000 yuan. However, recruitment personnel confirmed that while these are indeed "full-time" formal employee positions, the company won't provide social insurance for new employees, stating "insurance can be purchased after six months of employment."

Former employees question whether positions labeled as "full-time" are actually still "new flexible worker" positions.

According to China's Social Insurance Law, employers must apply for social insurance registration for employees within 30 days of employment.

**New Judicial Interpretation Takes Effect in September**

The restaurant industry's use of flexible employment is not uncommon. The China Chain Store & Franchise Association's "2022 China Chain Restaurant Industry Report" shows that sample companies' average flexible employment ratio increased from 13.9% in 2020 to 17.5% in 2021, with leading chain restaurants showing even higher ratios.

Haidilao's 2023 annual report showed 153,747 employees, with full-time employees accounting for 58.1% (89,233 people) and part-time employees comprising 41.9% (64,514 people).

A human resources company representative calculated that using flexible employment without "Five Insurances and One Fund" coverage, only purchasing work injury insurance, reduces labor costs by approximately 25%.

A Zhuhai restaurant owner explained that flexible employment better meets restaurant industry needs, given the low barriers to entry and high employee turnover rates common in the sector.

However, while pursuing employment flexibility, companies must also consider worker rights and long-term brand image.

The Supreme People's Court recently issued "Interpretation (II) on Legal Issues in Labor Dispute Cases," clarifying that agreements between employers and workers about not paying social insurance fees will be deemed invalid. The interpretation takes effect September 1st.

**Employee Costs Account for One-Third of Haidilao Revenue**

Haidilao's 2024 performance report revealed employee costs increased 8.2% year-over-year to 14.113 billion yuan, representing approximately 33% of total revenue. Total revenue reached 42.755 billion yuan with net profit of 4.708 billion yuan.

Employee costs primarily include salaries, wages, allowances, and benefits. The report attributed cost increases to improved overall employee compensation and benefits, plus additional staffing in certain positions.

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