The law in any country can be difficult to understand, so it’s not unusual that people who are living and working in China are often unaware of the benefits that they are entitled to while working here. This is especially true for foreigners, as there are fewer resources to let them know the exact laws and how they are applied. This is often compounded by the fact that some unscrupulous companies deliberately hide some of this information from their employees so that they will have fewer out of pocket expenses.
However, as foreign employees, those working in China are required to abide by the same laws and are also entitled to most of the benefits of their Chinese counterparts (there are some exceptions, such as National Health Insurance, etc.). So, we’ve put together a rundown of some of the benefits that you, as an employee working legally in China, are entitled to.
NOTE: We are not lawyers, and cannot speak to the actual application and interpretation of the law. If you are seeking advice on legal matters or similar issues, contact a lawyer.
In China, the minimum wage is set depending on the exact location that you are employed in. Larger cities have higher minimum wages, while smaller cities can be substantially less. In 2021, the minimum wage for Shaanxi province is divided into three tiers or classes. Xi’an is the only city in the highest class, with a minimum monthly salary of 1,950RMB and a minimum hourly rate of 19RMB per hour. The next class included cities like Baoji, Hanzhong, Xianyang, and Yan’an which have a minimum monthly salary of 1,850RMB and a minimum hourly salary of 18RMB. The final class includes the cities of Ankang and Shangluo, and have a minimum salary of 1,750RMB per month and a minimum hourly rate of 7RMB.
While most people will be making considerably more than this amount, this number does come into effect when calculating medical leave and some other benefits.
Overtime pay can be tricky to calculate, as there are different systems that a company may employ to calculate overtime.
In the standard model, a 40-hour work week, 8 hours per day, is used as the base amount of work. Any work over that 40 hours is considered overtime work, and there can be no more than 3 overtime hours per day, and no more than 36 overtime hours per month.
Standard overtime is calculated as follows:
Regular overtime on workdays: 150% of Basic Hourly Salary
Overtime on weekends: 200% Basic Hourly Salary
Overtime work on public holidays: 300% Basic Hourly Salary
(Basic Hourly Salary is calculated by taking the monthly salary and dividing by 174, the average number of work hours in a month)
Note that the overtime for holidays applies only to the actual date in question. So, if you were to work through the Labor Day Holiday (May 1st – May 5th) you would receive 300% pay only for May the 1st (the actual holiday), and 200% pay for the two standard weekend days, unless you worked the make up days before and after the holiday, in which case you would have four days at 200%.
Another system that is used is the comprehensive work hour system, which is used for jobs in which the work hours may be irregular, so the number of hours is calculated based on the number of hours over a set period. However, even under this system, the average number of work hours per day and per week should remain at or under the standard. Also, in order for a company to use this system, they must have special permission from the government.
Overtime pay for this type of work is calculated as follows:
Regular overtime: 150% of Basic Hourly Salary
Overtime work on public holidays: 300% Basic Hourly Salary
As there may be no set weekend days, there is no calculation for them. Even under this system, the overtime hours may not exceed 3 hours per day or 36 hours per month.
Under a third system, the non-fixed work hour system or flexible work hour system, there is no calculation for overtime pay. This is typically reserved for high-level management and other similar positions, where it is considered impractical to calculate overtime. This, like the comprehensive system, requires government approval to be implemented.
It should be noted that lunch breaks and other similar breaks often do not count towards overtime.
There are currently 11 public holidays that all workers are entitled to:
1 Day – New Year’s Day (Jan. 1st)
3 Days – Chinese New Year (First 3 days of Lunar Calendar)
1 Day – Tomb Sweeping Day (15th day from the Spring Equinox)
1 Day – Labor Day (May 1st)
1 Day – Dragonboat Festival (5th day of the 5th month of the Lunar Calendar)
1 Day – Mid-Autumn Festival (15th day of the 8th month of the Lunar Calendar)
3 Days – National Day (October 1st – 3rd)
Public holidays do not count toward statutory paid annual leave
Paid Annual Leave
Employees who have worked in a company for more than one year are entitled to paid annual leave. The amount of leave is depend on the length that you have worked in the company.
The rules are as follows:
More than one year to less than ten years = 5 working days paid leave
More than ten years but less than twenty years = 10 working days paid leave
More than 20 years = 15 working days paid leave
Note that this may not apply in cases where regular leave is part of the job, such as with high school and university teachers.
Illness and Injury
If an employee becomes ill due to a work-related illness or injury, they are entitled to their normal salary plus benefits for a period of up to 12 months.
If an employee suffers a disability from a work related accident or injury, they will be entitled to normal salary and benefits until an appraisal of their condition can be made, after which they will receive disability payments, which may come in a lump sum or in monthly payments depending on the case.
For non-work related illness or injury, the employees are entitle to paid leave from 3 months to 24 months depending on the length of time that they have worked for the company. While there are some slight differences in different areas, in general it is as follows:
<5 Years = 3-6 months
5 years to <10 Years = 9 months
10 years = 12 months
10 years to <15 years = 18 months
15 years to 20+ years = 24 months
During non-work related illness or injury leave, employees will receive 60-100% of their salaries, depending on seniority.
To activate sick leave, the employee must go to a hospital and be examined by a doctor, who can then issue a official approval of sick leave certificate. This is then given to the employer and the sick leave can commence.
During a medical related leave period, the employee may not be terminated and employment contracts must be extended to the day the approved sick leave period ends.
Female employees are entitles to 98 days of maternity leave, with an additional 15 days granted in cases of complications during birth.
Female employees receive and extra hour break each work day for one year after the child’s birth for breastfeeding purposes. In the case of multiple children in a single birth, an hour is added for each additional child.
During the pregnancy and maternity leave period, employees are entitled to their full salary and may not be terminated except under certain cases, such a severe misconduct.
Employee Data Protection Obligation
In 2012, a law entitled ‘The Decision on Strengthening the Protection of Online Information’ set out rules for various entities to follow in relation to electronic personal information. There are two major provisions. First, the company must inform the employees about the purpose, method, and scope of the information being collected and obtain written consent for its use. Second, employers must keep employee data confidential and may not disclose, distort or damage any of the data, nor sell it or illegally transmit it to others.
What do you do if your employer doesn’t follow these rules?
If you find that one of these rules has been broken, or if you have any other labor dispute with your employer, first, try to resolve the issue with them directly. Sometimes it is an ignorance of the rules that is the problem and when presented with the law, the employer will capitulate and do as they are supposed to. If your employer continues to violate these rules, then it would be best to consult a lawyer on the next steps towards arbitration or litigation.
We hope that this has been helpful for you. If you have a specific question or you would like us to continue to write about this topic, send us a message by contacting us through our official WeChat account or by email at email@example.com.