Minimum Working Conditions
The employment relationship established under the PRC employment laws and regulations is highly regulated. Employers are under a legal obligation to provide the minimum working conditions in the following aspects: i) labour remuneration; ii) rest and holidays; iii) working hours; iv) compensation for overtime work; v) contribution for social insurance; vi) payment of statutory severance where applicable; and vii) provide for a safe and healthy working environment and measures for protection against occupational hazards.
Employers and employees should specify salaries in their employment contracts. Full-time employees should be paid their salary at least once a month. Employees’ monthly salaries should not be less than the minimum monthly wage published by local governments. An employer should pay salaries to its employees in accordance with the law for official public holidays, marriage or bereavement leave and for any periods when they participate in social activities such as exercising the statutory election rights. Furthermore, employers may arrange compensation and bonus policies according to the law and their own needs. These policies may include content on performance bonuses, annual bonuses, stock options, etc. Individual income taxes and other taxes payable by employees are the responsibility of employees. However, employers should withhold individual income taxes and the employee’s portion of social insurance contributions from the employee’s salary and pay such amounts to the competent government departments on behalf of their employees.
Maximum Working Week
There are three working hour systems designed for full-time employees in China. Under the standard working hours system, employees work for eight hours per day and 40 hours per week and shall be guaranteed at least one rest day each week. The flexible and comprehensive working hour systems are usually applied to jobs that can be difficult to perform within a fixed working hours scheme. For employees under a flexible working hours system, PRC employment laws and regulations do not impose a limit on working hours, but require the employers to take appropriate measures to ensure that their employees are afforded time to rest.
In some circumstances, an employer may extend the working hours of an employee to accommodate changes in production or business operations, after consulting with the trade union and the employee concerned. Generally, overtime should be limited to one hour per day. In special circumstances, the overtime should be capped at three hours per day, provided that the employee’s health is not affected and the total monthly overtime shall not exceed 36 hours.
Employers are required to pay overtime compensation to employees under the standard working hours system as follows:
- 150% of an employee’s normal wage for extended work hours on workdays;
- 200% of an employee’s normal wage for working on rest days (if employers fail to provide comp-days);
- 300% of an employee’s normal wage for working on an official public holiday.
Employees working under the flexible working hours system are not entitled to overtime compensation, unless otherwise provided by local government regulations.
Employer’s Obligation to Provide a Healthy and Safe Workplace
According to PRC Labour Law, an employer must establish a sound labour safety and hygiene system and strictly implement state rules and standards of labour safety and hygiene, conduct labour safety and hygiene education among its employees, prevent accidents and reduce occupational hazards. Employers must also provide their employees with labour safety and hygiene conditions and necessary articles for labour protection in conformity with the regulations of the state and arrange for employees, whose work involves occupationally hazardous substances, to undertake regular occupational health checks.
The Work Safety Law of the PRC further clarifies employers’ work safety duties and obligations under the Labour Law and prescribes the administrative and criminal penalties an employer and its responsible personnel may face for violating work safety laws.
In addition, the Administration Norms of Employers’ Notification and Warning of Occupational Hazards (the “Norms”) address issues such as standardising the administration on employer’s notifications and warnings of occupational hazards; prevention and control of occupational hazards; and measures for protecting the health of its employees.
The Norms define the “Employer’s Notification of Occupational Hazards” and require the employers to sign employment contracts with employees, release announcements and offer training to employees, which would enable employees to truly understand the occupational hazards that occur or exist in the workplace, the prevention measures, the influence on health and the results of health checks. Also, the Norms define the “Employer’s Warning of Occupational Hazards” and require employers to put up the graphic signs, warning lines, warning languages, written notice and combined signs in the workplace, so as to remind the employees to be cautious about occupational hazards and take appropriate protective measures.
Employers who violate the Norms will be punished according to the Law on Prevention and Control of Occupational Disease of the PRC, Regulations on the Supervision and Administration of Occupational Hygiene in Workplaces and other laws and regulations.
Any person or entity is entitled to complain or report to the competent work safety supervisory authority, regarding an employer’s violation of laws and regulations with respect to occupational disease, hazards or accidents. Such violations include the following scenarios:
- where occupational diseases or hazards exist in the workplace, and the employer fails to meet specific requirements for occupational health;
- when any acute accident due to occupational hazards occurs or is likely to occur in the workplace, and the employer fails to immediately take emergency and control measures, or to make a timely and truthful report to the local public health authority;
- where the employer fails to take measures for prevention and treatment of occupational diseases;
- where the employer fails to ensure necessary funds are used for prevention and control of occupational diseases or misappropriates or diverts such funds; and
- where the employer fails to provide effective facilities or personal protective equipment to employees for prevention and treatment of occupational diseases.
If any complaint or report is made to the work safety supervisory authority, the said authority will usually undertake the following procedures: i) visit the reported company and enter its workplaces, conduct occupational disease and hazard testing, access relevant information, conduct investigation and collect evidence; ii) access and duplicate documents of the company concerning prevention and control of occupational diseases and hazards and collect relevant samples on site; iii) order the company to cease and desist any ongoing unlawful actions; iv) order the operations that cause occupational diseases, hazards or accidents suspended and then seal off the facility or equipment that has caused or may cause such occupational risks; and v) control the scene where the occupational diseases, hazards or accidents transpired.
When it is substantiated by the work safety supervisory authority that the employer has committed a violation in respect of prevention and control of occupational disease, the errant employer will be subject to the following punitive measures: i) warned and ordered to rectify within specific time limit; ii) a fine with its amount determined based on severity of the circumstance; or iii) ordered by local government to shut down the specific operation that generated the occupational disease hazards or the entire operation of the employer.
Protection from Retaliation
The PRC Labour Law explicitly stipulates that if employers unreasonably obstruct the labour administrative authority, relevant authorities or their officials from exercising the right of supervision and inspection and retaliate against the whistleblower, the labour administrative authority or relevant authorities may impose a fine on the employer, and the criminal liability of responsible personnel will be pursued, if the retaliatory action constitutes as a crime.