legal analysis: necessary. Employers need to pay social security to their employees. If a labor contract is not signed, the employees can apply for arbitration and demand double wages.

legal basis: article 46 of the labor contract law of the people's Republic of China is under any of the following circumstances. The employer shall pay economic compensation to the employee (1) the employee terminates the labor contract in accordance with the provisions of Article 38 of this Law; (2) the employer proposes to terminate the labor contract in accordance with the provisions of Article 36 of this Law; (3) the employer terminates the labor contract in accordance with the provisions of Article 41 of this Law; (4) the employer terminates the labor contract in accordance with the provisions of the first paragraph of Article 41 of this Law; (5) except that the employer maintains or improves the labor contract. In case that the labor contract is renewed under the same agreed conditions, and the employee does not agree to the renewal, the fixed-term labor contract shall be terminated in accordance with the first paragraph of Article 44 of this Law; 6) The labor contract shall be terminated in accordance with the fourth and fifth paragraphs of Article 44 of this Law; 7) Other circumstances stipulated by laws and administrative regulations.