China

Labor Compliance Guide

Labor Requirements

The Labor Law and Labor Contract Law set the standards of employment in China.  The central employment-related law in China is the Labor Law passed in 1994. A variety of other national laws and local rules cover such topics as employment contracts, benefits, social insurance, gender issues and trade unions.

 

The Labor Contract Law of 2008 tightened the rules governing employment agreements in an attempt to promote workers’ rights, and the government has taken some steps toward promoting collective bargaining and providing an explicit right to strike.

Hours & Pay Regulations

Normal Working Hours

The standard workweek is 8 hours a day and no more than 44 hours a week on the average.

 

The employer can adopt either the Comprehensive Working Hour system or the Flexible Working Hour system. Under the Comprehensive Working Hour system, the employer and employee determine how many hours should be worked in the labor contract whereas, under the Flexible Working Hours system, an employer may require certain staff, such as high-ranking managerial staff and sales staff, to work in excess of 40 hours per week.

 

Standard Working Hours System:

  • For overtime worked during normal working days – not less than 150% of the hourly salary for each overtime hour worked;
  • For overtime worked during any rest day (generally Saturday and Sunday) and if no extra rest could be arranged in lieu thereof – not less than 200% of the hourly salary for each overtime hour Worked; and
  • For overtime worked during the legal holidays (i.e., public holidays) – not less than 300% of the hourly salary for each overtime hour worked.

Non-Fixed Working Hours System:

  • Working hours are not calculated according to a fixed length;
  • Does not calculate any hours, so if an employee who’s working under a non-fixed working system, that employee is not entitled to overtime payment for work performed on Saturday, Sunday or Holidays;
  • Generally applied to senior managers and drivers; and
  • Approval from local officials is required.

Comprehensive Working Hours System:

  • The Comprehensive Working Hour System means that the working hours are comprehensively calculated in terms of per week, per month, per quarter, or per year;
  • Average working hours per day and per month shall be basically similar to those under the Standard Working Hour System;
  • Employers may require employees to work longer hours without paying for overtime so long as the average hours worked in a certain period do not exceed the limit on total hours for that period. If the limit is exceeded, then overtime compensation must be paid; and
  • Work performed on a statutory holiday still requires the employee to be compensated with no less than 300% of the normal rate.

Regulations of the State Council on the Hours of Work of Employees, 1995, art. 3.

Overtime

The standard eight-hour workday generally cannot be extended more than one hour per day, although up to three-hour extension is permitted under special circumstances. Even with special extensions, overtime generally may not exceed 36 hours in a month, except in the case of natural disasters, accidents or other circumstances in which the health or life of workers or the safety of the workplace is at risk or if a breakdown of public facilities, such as transportation or utilities, is involved.

 

Employees required to work additional hours beyond the standard eight-hour workday are entitled to overtime pay based on the following criteria:

  • Regular Working Day: 150% of regular hourly wages;
  • Rest Day: Compensatory time off or 200% of regular hourly wages; and
  • Statutory/Public Holiday: 300% of regular hourly wages.

Under the Comprehensive Working Hour system, overtime is paid only if the agreed number of hours is exceeded. Under the Flexible Working Hours system, an employer may require certain staff to work in excess of 40 hours per week without paying overtime compensation. Labor Law, 1995, art. 44.

Breaks

No special requirements concerning meal and rest breaks exist, refer to any applicable company regulations which may exist.

Work On Rest Days

The employer shall guarantee its employees at least 1 day off in a week.

Public Holidays

Employees are entitled to 11 national holidays, the dates of some of which vary year to year depending on the lunar calendar:

  • Dec 30 – Jan. 1: New Year’s Day;
  • Spring Festival: 7 days in total, usually between late January and mid-February;
  • Tomb Sweeping Day: 3 days in total, usually between April 4th – 7th;
  • May 1: International Labor Day;
  • Dragon Boat Festival: 3 days in total; Friday to Sunday, usually in May or June;
  • Mid-Autumn Festival: 3 days in total; Friday to Sunday, usually between mid-September and mid-October; and
  • National Day: 7 days in total; Tuesday to Monday (early October)

The adjusted holiday arrangement permits switching non-working days with working days to grant a longer consecutive period of days off for the employees.

 

Organizations should note that Saturdays and Sundays are often marked as additional official working days in China to offset long vacation breaks. Foreign human resource managers should note that Saturdays and Sundays are often marked as additional official work days in China to compensate for long holiday breaks. For example, in 2019, Saturday, February 2 and Sunday, February 3 will be official working days designated to partially offset the Spring Festival’s seven days off. However, private companies in China have the right to determine their own schedules–which allow additional days off–while maintaining the official holiday calendar.

 

Adjusted Holiday Arrangements for 2018:

  • The official national holiday and the adjusted holiday arrangement in China for 2018 were published on November 30, 2017.
  • The adjusted holiday arrangement permits switching non-working days with working days to grant a longer consecutive period of days off for the employees.
  • Private companies are not legally required to follow the adjusted holiday arrangement. They may provide additional non-working days provided they follow the official public holiday schedule.

Every year, the government also provides additional public holidays to make long holiday weeks, known as “Golden Weeks,” for the Spring Festival and the National Day holidays.

 

Employees who are required to work on a holiday are entitled to 300 percent of pay.  Regulations on Annual Holidays; Labor Law, 1995, art. 44.

 

Annual Leave

Employees are entitled to annual vacation as per the following criteria:

  • With less than one year of work tenure – No leaves;
  • With 1-10 years of work tenure – 5 days of leave;
  • With 10-20 years of work tenure – 10 days of leave; and
  • With over 20 years of work tenure – 15 days of leave.

If the employer does not allow the employee to take the annual leave (by the end of the current calendar year or anytime in the subsequent calendar year), and if the employee agrees to accept compensation in lieu of such accrued but untaken leave, the employer will be obliged to pay the employee 300 per cent of the normal daily salary.

 

Employees may not take paid annual leave under the following circumstances:

  • The employee is entitled to winter/summer holidays and the length of these holidays exceeds the amount of annual leave that the employee may have;
  • The employee has taken paid personal leave for more than 20 days in that year;
  • The employee has worked with his/her employer for more than 1 year but less than 10 years and has taken sick leave for more than 2 months in that year; and
  • The employee has worked with his/her employer for more than 20 years and has taken sick leave for more than 4 months in that year.

Regulations on Paid Annual Leave for Employees, 2007, arts. 3, 5.

Minimum Wage

From 1 April 2018, the statutory minimum wage of Shanghai has increased by 5.2 % to RMB 2,420 per month. The hourly rate has been increased from 20 yuan to 21 yuan per hour.

Special Leave

Maternity Leave

Female employees are entitled to a minimum of 98-day paid maternity leave including 15 days prior to childbirth (discretion of the employee). Leave may be extended by 15 days under special circumstances such as dystocia. If the employee gives birth to more than one child at a time, an additional 15-day maternity leave shall be given for each additional infant. 15 days of maternity leave is offered in cases of abortion after a pregnancy shorter than four months, and no less than six weeks of maternity leave in cases of miscarriage/abortion after a pregnancy longer than four months. The Maternity leave varies according to the location. Special Rules Concerning the Labor Protection of Female Employees, 2012, art. 7.

Breast-feeding period

A female employee is also given at least one hour daily during work hours for breast-feeding during the first-year post birth of the child. Special Rules Concerning the Labor Protection of Female Employees, 2012, art. 7.

Paternity Leave

The amount of time that a male employee can take as paternity leave largely depends on the locality. For example, in Shanghai, a male employee is entitled to 10 days paternity leave in the case of late childbirth and in Shenzhen and Beijing, a male employee is entitled to 15 days paternity leave if his wife is 23 or older.

Sick Leave

Sick leave entitlements vary according to provincial and municipal regulations. An employee suffering from illness or non-work-related injuries is entitled to a sick-leave period ranging from 3 to 24 months, depending on the number of years the employee has worked for an employer and his/her total years of work experience. Generally, an employee is compensated during his/her sick-leave period at 60 to 100 percent of his/her regular wage, depending on the employee’s seniority. Sick-leave entitlement does not have to be taken in a single installment. An employee may exhaust his/her leave entitlement at different times.  Enterprise Workers Illness or Non-Work Related Injury Medical Period Specified, 1994, art. 3.

Visitation leave

It is a paid leave entitlement granted to any employee who: 1) Is working in government organizations or state-owned enterprises; 2) Has worked for more than 1 year for that employer; 3) Does not live with his or her spouse or parents; and 4) Cannot visit his or her spouse or parents on a rest day. If the employee is to visit his or her spouse, such employee is entitled to 30 days spouse visitation leave once in a year.  State Council, Regs. on Treatment for Employees Who Visit Their Relatives, eff. Mar. 14, 1981.

Bereavement leave

When an employee’s parent, spouse, or child dies, such employee is entitled to between one and three days of paid bereavement leave.

Paid Leave to take for Sick Parents

A number of cities in China are starting to introduce new leave entitlements enabling employees, who are the only children in their family, to take fully paid leave to care for elderly parents. Fujian, Guangxi, Hainan, Henan, Hubei, and Heilongjiang provinces have all issued similar paid leave regulations enabling employees to take off between 10 and 20 days per year to care for sick parents. Employees in Chongqing are entitled to up to 10 days of paid leave per year to take care of their hospitalized parents, effective March 1, 2018. Employees in Guangzhou are entitled to paid leave of up to 15 days per year to take care of parents older than 60 years old who are receiving treatment in a hospital, effective February 1, 2018.

Last updated on: September 5th, 2019