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"We agreed not to pay it" is void - and why a buyer should care
On its face this rule governs the employment relationship. What reaches the buyer is the stability of the quote and the delivery date.
The rule changed
Article 19 of the Supreme People's Court Interpretation (II) on labour disputes took effect on 1 September 2025: any agreement or undertaking to give up social insurance is void, and an employee can rely on it to terminate the contract and claim compensation. The old "sign a piece of paper saying you waive it" no longer shields anyone - the paper itself is now part of the problem. It neither removes the employer's contribution obligation nor protects either side once a dispute starts.
Why a buyer should care
As employment compliance tightens, the supplier's labour cost will show up in quotes and lead times sooner or later, and that belongs in the arithmetic on a long-term order. The more direct issue is stability: an employment arrangement any worker can challenge for compensation affects whether the line ships on time, and the tighter the order, the more expensive that uncertainty gets. This is not about how big the factory is; it is about how stable the staffing arrangement is. In a factory audit, a stack of certificates tells you less than asking how people are actually employed - certificates describe what has been done, the arrangement describes whether delivery will hold.
Put it into the question list
"What base is social insurance calculated on, and which roles does it cover?", "Do outsourced and dispatched workers sit inside that arrangement?", "Who holds the contracts, wages and contributions for line workers?" Ask these alongside your other questions rather than as an interrogation on their own - a factory that can answer is usually also willing to show records, while one that dodges, or waves it away with "that is how everyone does it here", is where to keep digging. Another thing worth checking is whether the number of people on the contribution roll matches the number actually on the payroll; if it does not, ask why - that gets you closer to the real staffing picture than any certificate. You can fold these into the factory-audit part of the checklist and work through them together with the line and inspection questions.