In Chinese employment law, overtime is any time worked in excess of the time on a 40-hour workweek, or in excess of the schedule approved by the local labor regulator. Under the Employment Act, overtime is limited to no more than 3 hours per day and 36 hours per month, with overtime wages paid at 1.5 to 3 times the employee’s regular wage rate. In practice, managers in China aggressively demand undocumented and unpaid overtime from employees, which is enabled by untracked time worked on WeChat, resulting in employees working all times of the day. Technology companies are notorious for demanding round-the-clock overtime from employees and have utilized a variety of corporate culture initiatives to instill a belief among employees that “overtime is glorious.” Nonetheless, local psychologists agree that these initiatives are damaging employees’ physical and mental health, and make it impossible for employees to speak up and advocate for reasonable working conditions. In response, local governments have started cracking down on excessive overtime (see Reuters report). While the 996 culture has been outlawed back in 2021, excessive overtime never stopped due to a lack of enforcement. Earlier this year, however, local governments started to tighten up the enforcement and employers were fined for requiring excessive overtime. Employees are starting to share posts on social media platforms about what had appeared to be a new workplace phenomenon: no overtime.

A notable phenomenon is “996”, which refers to working from 9AM to 9PM, 6 days a week to push overtime to the physiological maximum. China’s labor regulators have issued several declarations that they have lost faith in the business community’s ability to internally ensure their compliance with the law. Plans for hiring more labor regulatory personnel to enforce the law at companies have been announced, and aggressively punish violations in order to protect workers’ rights. Changes in overtime regulatory enforcement are expected to be beneficial to foreign owned businesses operating in China by providing a more level playing field. Western companies in China typically do not have anything as extreme as 996 and do not make breaking the law part of their core business strategy. Ironically, while the Chinese government has pushed back against the extreme 996 schedule, US AI startups are reported to be embracing a similarly demanding “72-hour work week” schedule as the AI race intensifies.

Overtime Under China’s Work Hour Plans

Overtime pay is calculated based on the employee’s work hours plan, which specifies how many hours an employee actually works for their employer. Chinese law recognizes two categories of work hours plans: the standard work hours plan and alternative work hours plans.

The standard work hours plan is 8 hours per day and 40 hours per week. It is the most common plan used by employers and employees in China.

Alternative work hour plans include fluctuating work hours plans and irregular work hours plans, and require regulatory approval. Hours under a fluctuating work hour plan are calculated over a set period, such as a week, month, quarter, or year. Daily and weekly work hours may vary during that period, but any time worked beyond the statutory standard work hours for that period is counted as overtime. These plans are typically used in jobs that require employees to work continuously extended periods or in seasonally affected industries such as transportation, construction, and tourism.

Irregular work hour plans can be used for employees for whom it is not feasible to work on a fixed work schedule due to the nature of the industry, the job, or the employee’s duties, such as executives and salespeople. These plans do not set fixed daily or weekly work hours and employees working under irregular hour plans do not receive overtime pay, which can affect their earnings, time off and leave, and physical and mental health. Because of these risks, irregular work hour plans are subject to strict controls intended to prevent abuse and protect employee rights.

Overtime Rates in China

Rates for overtime on regular work days and holidays are based on an employee’s regular monthly salary, excluding supplemental wages such as bonuses, heat hazard pay, and overtime pay.

Monthly workdays = (365 days – 104 days) / 12 months = 21.75 days
Overtime daily rate = daily wage / 21.75
Overtime hourly rate = hourly wage / (21.75 × 8)

Employees working overtime under a standard work hours plan are paid 1.5 times their regular hourly wage for all overtime hours. If an employee works on a scheduled day off and the employer cannot provide compensatory time off, the employer is required to pay at least twice the employee’s regular daily or hourly wage for those hours. Under a fluctuating work hour plan, any hours worked in excess of the statutory standard work hours across the entire calculation period are treated as overtime and paid at 1.5 times the employee’s regular wage, excluding overtime worked on public holidays. Overtime worked on a public holiday must be paid at three times the employee’s regular daily or hourly wage regardless of work hours plan.

The law allows employers to provide compensatory time off in lieu of overtime pay for work performed on regular days off. Public holidays are treated differently because of their social and cultural importance, and compensatory time off in lieu of overtime pay is not permitted on holidays. Employers must pay overtime rates for all hours worked on public holidays.

Further Reading

Learn more about China’s overtime law in CBL’s explainer here.