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China: Measures Released for Administration of Special Accounts for Paying Wages to Migrant Workers

The Ministry of Human Resources and Social Security, together with nine other departments, recently issued the Interim Measures for Administration of Special Accounts for Migrant Workers’ Wages in the Construction Sector (“Interim Measures“). The construction contractor’s establishment of such special accounts under the Interim Measures is to separate wage payments to migrant workers from other amounts, such as material expenses or management costs collected from the project owner.

The Interim Measures are expected to completely solve the problem of wage arrears among migrant workers in the field of construction, standardise the administration of special accounts for wage payments to migrant workers, and effectively protect their rights in collecting the labour remuneration. The Interim Measures have clarified the relevant requirements for the opening and cancellation of the special accounts for paying wages to migrant workers, the release of labour costs, the procedures for wage payment, the establishment of monitoring platforms and others, in accordance with the Regulation on Ensuring Wage Payment to Migrant Workers, the Measures for Administration of Renminbi Bank Settlement Accounts and other applicable regulations.

Key Action Points for Human Resources and In-house Counsel 

The concept of a special account for paying wages to migrant workers is stressed in the Regulation on Ensuring Wage Payment to Migrant Workers effective from May 2020. The Interim Measures is further promulgated to set forth detailed requirements relating to the handling of such special accounts. It is advisable for contractors or subcontractor companies in the sector of construction, to pay close attention to the Interim Measures and ensure their handling of the special accounts is compliant with all mandatory requirements.