Dear Esteemed Client,
 
I hope this letter finds you well. Recently, a long-standing consulting client of mine approached me with a situation that warrants our attention. They informed me that an employee, who had been with their company for only two months, tragically passed away due to a heart attack during working hours. The employee’s family is now seeking compensation, but the company had not enrolled the employee in the social insurance program. They sought my advice on how to proceed in this situation.
 
According to Chinese laws and regulations, when an employee passes away during working hours, it is classified as a work-related death. The compensation that the family is entitled to comprises three components: funeral allowance, support for surviving family members, and a one-time work-related death compensation. The funeral allowance is calculated based on the average monthly salary of insured individuals in the previous year in the location where the deceased was insured, which amounts to 45,750 RMB in Urumqi for the year 2023. The one-time work-related death compensation is calculated at 20 times the national per capita disposable income from the previous year, totaling 985,660 RMB. Additionally, support for surviving family members is determined based on the deceased employee’s pre-death salary. In this case, the total compensation would be 1,031,410 RMB, excluding support for surviving family members.
 
If a company has not provided social insurance for its employees and an accident occurs during working hours, the responsibility for compensation falls on the company. Conversely, if the company has enrolled the employee in the social insurance program, the compensation responsibility lies with the social insurance bureau.
 
Although this employee worked for only two months, according to legal stipulations, they are entitled to compensation as a regular employee.

 

In light of this, I would like to emphasize two crucial points for enterprises to consider:
 

1. When negotiating with the employee’s family, it is imperative to ascertain the legal heirs of the deceased. One should not enter into a compensation settlement agreement with them casually.

2. Choose the judicial process. I have encountered cases where an enterprise privately compensated the family of a deceased employee, only to face further demands for compensation from the deceased’s son. The initial claimant was the deceased employee’s sister.
 
In accordance with Chinese regulations, the compensation for work-related deaths is handled in reference to legal inheritance provisions, but it may not align entirely with them. Therefore, opting for a judicial process and abiding by the requirements of a court judgment is the wisest and least risky course of action. Enterprises should refrain from hastily settling with the family of the deceased employee.
 
If a company is concerned that pursuing legal proceedings may tarnish its reputation, it is imperative to seek the guidance of a professional lawyer. Under the counsel of a lawyer, enter into a professional contract with the family of the deceased to safeguard the company’s interests and prevent scenarios akin to the one described above.

I am pleased to inform you that in the past year, I have assisted over 20 foreign-invested enterprises with their labor matters in China.
 
For further inquiries or assistance, please do not hesitate to contact me at abbylawyerchina@gmail.com

Sincerely,
Abby