05. Pay Equity Laws

Extent of Protection

General provisions on the principle of “equal pay for equal work” exist in different PRC laws. The PRC Constitution provides that the state shall protect the rights and interests of women, implement equal pay for equal work by men and women, and train and select female officials. The PRC Labour Law also prescribes that wages shall be distributed according to contribution and equal pay for equal work shall be implemented.

The PRC Labour Contract Law specifically prescribes the equal pay for equal work under the context of a labour dispatchment relationship, according to which, dispatched employees shall be entitled to receive the same pay as employees directly hired and working in the same positions. In addition, the same labour remuneration system shall be used for the dispatched employees and directly-hired employees, based on the principle of equal pay for equal work.

In some areas in China, the people’s courts have issued judicial opinions that provide further details to guide the hearings in cases involving equal pay. According to the judicial opinions issued by the Shanghai High People’s Court, “equal work” cannot be simply determined based on the employees working in the same position, but rather the court should comprehensively consider the factors, such as employees’ work experience, work skills, work enthusiasm and other special circumstances, and employers are allowed to pay employees working in the same position according to different remuneration standards based on these factors.

Remedies

An employee may challenge equal pay practices by filing labour arbitration/litigation against the employer; the available remedy for such claims is to force the employer to make up the difference in salary. In addition to the judicial proceedings, employees may also apply to the trade union and request mediation for resolving the dispute with the employer regarding salary standards.

Enforcement/Litigation

In view of the judicial practice in China, most cases involving a claim seeking to remedy salary differences based on the principle of “equal pay for equal work” have not, generally, been supported by the courts, as it is extremely difficult for employees to prove that the employer has violated the principle of “equal pay for equal work”.

An employer usually defends and justifies certain employees, who are paid higher wages despite working in the same position as the (employee) petitioner, by pointing out their superior education, work experience, work skills, performance, etc. In addition, employers in China are not obliged to release information regarding an employee’s salary, which functions as a practical barrier that prevents employees from initiating a claim based on equal pay.

Other Requirements

Except for the provisions mentioned above, there are no other rules in the current PRC legal scheme that would compel employers to take any positive action on equal pay.