China: Beijing: Maternity leave shall not be categorized as a statutory holiday and the female employee shall not be entitled to triple pay for overtime during Maternity leave
In 2017, Ms. Yang (“Employee“) and the Company (“Employer”) signed an employment contract. During her maternity leave in 2018, the Employee worked for a certain period of time, and the Employer paid her salary at the normal rate. The Employee filed labor arbitration and litigation against the Employer, claiming that maternity leave shall be considered a statutory holiday, and therefore, her salary during maternity leave shall be calculated at triple the normal rate. Beijing No.3 Intermediate Court heard this dispute and ruled against the Employee.
The Court came to this decision based on the following reasons that according to the PRC Employment Law, when arranging for an employee to work during a statutory holiday, the employer shall pay not less than 300% of the normal wage. However, statutory holidays shall be specific dates that are applicable to the public and well-known to people. Situations such as marriage leave, funeral leave, and annual leave vary from person to person and are rest days for specific occupations, specific personnel, or specific periods. Therefore, maternity leave shall not be considered a statutory holiday and the Employee shall not be paid at triple the normal rate for labor compensation.
The Employee also claimed for maternity allowance in addition to her labor compensation. However, the Court held that the maternity allowance is a social security measure which provides basic living expenses for female employees during maternity leave and it is an alternative form of payment for the female employee’s salary during the maternity leave period. Therefore, the Court did not support the claim for simultaneous payment of the maternity allowance.
Key Action Points
To avoid disputes, employers shall inform their employees of the wage calculation standards for overtime during maternity leave, marriage leave, and annual leave before the leave period in accordance with the law and local regulations. Employers may also choose to agree with employees on the wage calculation standards during the leave period, and the agreement shall clearly list the applicable types of leave to avoid disputes arising from the use of vague terms such as “statutory holidays”.
