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Foreign Enterprises – Compensation for work-related death in China



China Employee Death update. Every year there are in excess of 600,000 “work related” deaths in China but do you know that your company can still be liable for an employee death up to 48 hours after completion of work!

In the awful event that an employee suffers a work related death, the following issues will need to be addressed:

    1. How to determine if your company is liable?

    2. What is the level of liability?

    3. What is the process to deal with a work related death?


 1. Is your company Liable?

In China, its work-related Injury Insurance policy defines a “work-related injury” as “Accidental Injuries suffered, due to work activities, during work hours and within the workplace

However in 2011, this scope was expanded to included incidents occurring outside of the work premises, such as while travelling for work reasons, employees who die during the workday or within 48 hours after work, employees who contract occupational illnesses or accidentally injure themselves.

If the death of an employee is not identified as a work-related injury, it doesn’t totally exempt the liabilities of the employer. If the employer’s conduct satisfies the elements provided in the “Tort Law of People’s Republic of China”, the employer may still bear corresponding legal liabilities.


 2. What is the level of liability?

Below is a chat which breaks down into three key areas the compensation which could be due:

 Payments to Relatives of Employees Killed in a Work-related Accident 

Compensation Type Costs  Standard for Payment Calculation  Type of Payment  Does Social

Insurance cover this?

(i) Funeral Cost 6 month’s wages Local Average Wage (Previous Year) Lump Sum Yes
(ii) Death Compensation 20 years National Average Annual Wage Lump Sum Yes
(iii) Pension for Dependents
1. Spouse, Orphaned Child or Orphaned Elderly Parent 40% of wage Employees Actual wage Monthly until Child is 18, spouse remarries or Parent passes away Yes
2. Other Relatives 30% of wage Employees Actual wage Monthly until death Yes


 3. What is the process to deal with an worth related death?

It is the employer’s responsibility to pay the social insurance for all employees (full time, part time and temporary)

The social Insurance is broken down into 6 areas:

1. Maternity Insurance

2. Medical Insurance

3. Work-related Injury Insurance

4. Unemployment Insurance

5. Pension Fund

6. Housing Fund

The amounts to be paid into each are variable and depend on the type of industry the employer is involved in. For the rest of this article I am writing on the assumption that all insurances are fully paid and meet all requirements.

When a death of an employee occurs a claim must be filed against the “Work-related Injury Insurance”.  It is the employer’s responsibility to:

1. Submit supporting documents such as certified medical forms within the very tight time lines (usually within 15 days).

2. Clearly demonstrate that they are working hard to ensure that the bereaved family receives their funds & subsidies in a timely manner. This includes keeping very frequent contact with the local labor office, the insurance agency handling the claim and any health department.


The family of the deceased may hire a lawyer within days after the death. This reason that a lawyer may be hired is because some employers do not pay the mandatory social insurance and the family want to make sure that they receive their entitlements. A visit to a labor court may be sought by the family.

The basic compensation process, for death, is broken down into three stages:

1. Official diagnosis by an official health authority.

2. Verification by the local labor and social security authorities that the death is actually work related.

3. Calculation of the benefits to be paid by the social security authority (usually 90 days after the death).

These steps can multiply rapidly if at any stage the employer or family of the deceased employee challenges any medical evidence or rulings from the labor and social security authorities.



The death of an employee is a terrible event for any business. With regulations in China stating that an employer is responsible for an employee up to 48 hours after completion of work there is a major onus on the employer to ensure that it has all its social insurance paid.

In the unfortunate event that your enterprise in China experiences such an event it is recommended to assign a dedicated member of its senior management team to take charge of the process plus hire a competent lawyer to advise on the issue plus provide support in dealing with the family and government authorities.

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