China: The Supreme People’s Court, the Ministry of Human Resources and Social Security, and the All-China Federation of Trade Unions released typical cases related to wage arrears disputes

Authors: Carol Zhu and Lynsey Liu

On 25 January 2024, the Supreme People’s Court, the Ministry of Human Resources and Social Security, and the All-China Federation of Trade Unions released typical cases related to wage arrears disputes. A total of thirteen typical cases were released, addressing the following issues:

Recognising the limited evidence collection capabilities and awareness among employees, the typical cases establish that employers bear the burden of proof regarding wage payments. Moreover, they clarify that evidence obtained by labour supervision administrations through lawful means can be used as evidence in arbitration proceedings.

In cases where construction companies lend their qualifications to other unqualified entities or individuals, allowing them to subcontract construction projects under the name of the construction company, resulting in wage arrears for migrant workers, the unqualified entities or individuals and the construction company shall share the responsibility for settling the outstanding wages.

When employers change the method of wage payment, such as opting for third-party software or online platforms, resulting in difficulties for employees in accessing their wages or even deductions that objectively reduce their income levels, the typical cases emphasize that employers shall reach a consensus with employees regarding any changes to wage payment methods.

Concerning the issue of “online overtime,” the courts determine overtime pay based on employees utilising their rest time for work. Factors such as the frequency, duration, wage standards, and nature of the work are considered to reasonably determine the amount of overtime pay.

Key Action Points

Among various types of labour disputes, wage arrears are typically a matter of great concern for the government. For foreign-invested employers, the cases related to “online overtime” have certain reference value, as they can consider establishing appropriate working hours and overtime systems to avoid related risks.