China-based employees answering work messages after hours may be entitled to overtime, even if that overtime was not approved. The general rule for counting it as overtime is whether the employee was performing substantive work as part of their main role, and not providing brief or sporadic communication. Employers are therefore not protected by an overtime approval policy, and instead can only rely on their work scheduling policy. Alternative schedules are available to reduce costs for certain positions or business models, but require obtaining advance regulatory approval. In this article, we will explain Chinese employment law on off-the-clock work, and introduce options for legally controlling overtime payment obligations.

Contents

• Off-the-Clock Work Hours: Recognition and Management
• Choosing a Work Schedule Plan
• Filing Alternative Workweek Plans
• Overtime Pay Rules for the Standard Work Schedule
• Averaged Work Hours Plan and Irregular Workweek Overtime
• Overtime Management Strategies

Off-the-Clock Work Hours: Recognition and Management

Remote work, flexible scheduling, and the separation of work and the workplace in China have made off-the-clock work a major issue in employment management. Off-the-clock work occurs when employees address work-related matters outside of work hours (i.e., after work, on weekends, or on holidays) using email or instant messaging tools, thereby encroaching on their non-working time even though no overtime is formally required.

A Supreme Court report provides a legal basis for off-the-clock work to be recognized as overtime. The courts look at whether the work is substantive and takes a significant amount of time. Substantive work occurs if activity during non-working hours is part of the employee’s primary duties, is recurring, and is not just brief, sporadic communication.[1] The significance of the time spent is determined by the nature of the work, the complexity of the work, and its duration.

Employers can use the following strategies to avoid off-the-clock work litigation:

1. Implement effective work time management policies to define work hours and non-working hours, and set up a reasonable overtime pre-approval policy.
2. Improve internal communication processes and assign tasks appropriately to avoid off-the-clock work.
3. Provide overtime compensation or time off in lieu of overtime pay for off-the-clock work to avoid litigation.

The main challenge for employers is determining overtime. Many employer policies provide that overtime must be approved, but off-the-clock work undermines this approach, because a substantive inquiry is needed to determine whether overtime was actually worked. Therefore, relying solely on such policies is no longer sufficient for effective overtime management, and employers should instead reassess overtime management processes throughout their operating units’ day-to-day operations.

Choosing a Work Schedule Plan

Selecting a work schedule plan in China depends on the nature of the industry, business management, and job positions. If an employer has continuous operations and production concentrated in particular periods, such as weekend overtime, or has on-call employees working consecutive days, then an averaged work hours plan is preferable. If an employer has certain roles with irregular work hours or flexible tasks that cannot be measured by standard work hours, consider an irregular workweek plan.

The standard work schedule is the default and does not require approval. If an employer can’t use this because of the nature of their work, it must submit an application to the local Employment and Social Security agency in the jurisdiction where the business license is registered to adopt an averaged work hours plan or irregular workweek. These alternative workweek plans cannot be adopted without approval. However, Beijing employers may adopt an irregular workweek for executives without approval.

Work schedule plan provisions are mandatory in employment contracts under Chinese law, whether as a boilerplate clause applicable to all employees, or as an option selected by managers based on individual circumstances. In either case, employers may specify in the contract that a standard work schedule, averaged work hours, or irregular workweek will be used upon approval from the employment regulator, and include the work schedule, time off, and overtime policies. The averaged work hours plan or irregular workweek approved for an employee position during the contract term would automatically apply from the approval date, and no separate amendment is needed. Many scheduling options require regulatory approval to use and generally should be reviewed by an expert to ensure legal compliance.

If you need help with employment issues in China, CBL can help connect you with a qualified attorney.

Filing Alternative Workweek Plans

If the employment contract in China does not specify a work schedule plan, or the provision is unclear, the standard work schedule applies. If the actual work schedule plan doesn’t match the contract terms, courts will look at the employee’s position, nature of work, and time worked to determine the applicable plan. Therefore, employers should include an express work schedule plan provision in employment contracts, and provide for how the plan can be changed.

Each region has specific filing and approval rules for averaged work hours and irregular workweek plans. Employers must prepare application materials. Stakeholder engagement and public notice are required for alternative workweek schedules. The employer must consult the union, meeting of employee representatives, or employees before starting an averaged work hours or irregular workweek plan, and must disclose the work and time off policy to employees. Specifically, if the employer has a union, the union must provide an opinion; if not, the employer must submit employee meeting minutes and opinions from affected employees.

The employer submits the required materials to the labor regulatory agency to obtain regulatory approval for the averaged work hours or irregular workweek. After approval, the employer must promptly disclose the approved plan to employees. The agency will also periodically conduct regulatory audits of employers using approved alternative workweek plans. Employers should apply the approved plan in strict compliance with the regulatory approval.

Overtime Pay Rules for the Standard Work Schedule

The China Employee Work Hour Rules (State Council) § 3 provides for 8 hours of work per day, 40 hours per week, and at least one day off per week.[2] Overtime is allowed with labor union and employee agreement to meet business needs, but may not exceed 1 hour per day, except in special circumstances where it may be up to 3 hours per day and no more than 36 hours per month. Overtime pay is at least 150% of wages for overtime on a workday, 200% if worked on days off and no compensatory time off was given, and 300% for statutory holiday overtime. Local regulations and judicial precedents vary widely on how the overtime wage base is determined. For example, in Beijing, the overtime wage base is determined based on the employment contract, a collective bargaining agreement, or wages for regular work. If the wage base falls below the local minimum wage rate, the minimum wage rate is used.[3]

There is no single way employers in China calculate the overtime wage base. Some employers use base pay, and others use the statutory minimum wage rate. The rules explicitly provide how to calculate the overtime wage base, and noncompliance can expose employers to liability for overtime pay underpayments. Employers should design reasonable compensation structures and include the wage rate and overtime wage base in employment contracts. The overtime wage base should be based on the employee’s fixed compensation, which should not be less than the wage rate in the employment contract. Courts will generally apply the wage rate as the overtime wage base if the contract specifies a wage rate but also provides that the overtime wage base is the local minimum wage rate or below the employment contract wage rate.[3]

In employment litigation, employees bear the burden of proof for overtime claims. However, employers must also produce any evidence under their control that is relevant to the claim, or risk an adverse inference. Unpaid overtime pay exposes the employer to these legal risks:

1. An employee may terminate the employment contract under the China Employment Contracts Act for unpaid compensation and benefits, including overtime pay. The employer must also provide statutory severance pay.
2. The Beijing Wage Payment Rules and China Employment Rights Oversight Regulations empower the labor regulator to issue a back pay order and impose additional monetary damages equal to 50% to 100% of the amount owed if the payment is not made by the deadline. Excessive overtime is also subject to a warning, cease and desist order, and 100-500 yuan fines per affected employee.[4][5]

Averaged Work Hours Plan and Irregular Workweek Overtime

Under the averaged work hours plan in China, total work hours are calculated over a weekly, monthly, quarterly, or annual work hour averaging period, with average daily hours and average weekly hours not exceeding the statutory maximum of eight hours per day and forty hours per week. The calculation period must also account for all applicable statutory holidays. Workdays and days of rest are not distinguished, and work performed on a day of rest does not qualify for 200% overtime pay. Rather, all hours worked in the calculation period that exceed the statutory workweek are treated as overtime, which is paid at 150% of the employee’s wages. Work performed on a statutory holiday is paid at 300% of wages.

The irregular workweek in China is a flexible work arrangement used for employees whose work cannot be measured by standard work hours due to the nature of the work, job duties, or other needs, or whose work hours are irregular and require flexible scheduling. Under an irregular workweek, employers are generally not required to pay overtime pay except as required by local laws for statutory holiday overtime.

Employers using an irregular workweek may use centralized work and rest periods, rotating and adjusted time off, and flexible hours, as long as employee health is protected and input is sought. This ensures employees’ right to breaks and time off while maintaining productivity. Therefore, employers are not constrained by the standard work schedule for irregular workweek employees. Employees set their own work hours so overtime is generally not applicable. However, local laws vary on whether work on legal holidays counts as overtime.

Most jurisdictions do not consider work on legal holidays overtime for employees under an irregular workweek. However, in China, Shanghai, Shenzhen, and Tianjin treat it as overtime and require overtime pay at 300% of the employee’s wages.[6][7][8]

Overtime Management Strategies

Seasonal and atypical businesses in China can control overtime costs by using averaged work hours to spread overtime hours across off-peak or slow periods. Employees on an irregular workweek are entitled to overtime pay only on legal holidays—except in Shanghai and Shenzhen, where no overtime pay is required even for work on legal holidays—and no overtime pay is owed for other hours, so irregular workweeks also help control overtime costs.

Overtime isn’t merely time worked. It must involve work activities. Overtime facts appear in attendance and shift-change records, overtime approval forms, payroll records, and witness testimony. Employers should establish enforceable company policies for attendance and overtime, and ensure they are actually implemented. Attendance policies should cover scheduling practices, determination of violations, and leave and attendance management, and be communicated to employees. Attendance records for each calculation period should be documented and confirmed with a signature by relevant personnel. Overtime should be managed through a sound approval system using overtime approval forms that document the reason, work activities, and overtime hours, and ensure those with approval authority do not fail to act.

Payroll records must clearly show each month’s overtime compensation and be signed by the employee. In employment litigation, an employer that assigns overtime work without showing overtime compensation in payroll records may be at a disadvantage if the employee claims overtime pay. Employers must provide attendance and payroll records in employment litigation and may face adverse inferences if they cannot or refuse to do so. Retain these documents for two years after an employee leaves to protect yourself during the statute of limitations for compensation claims under the Employment Mediation and Arbitration Act.[9]

Under the China Wage Payment Temporary Rules § 13, employers may offer time off in lieu of overtime pay for work on days off. Where feasible, employers should prioritize this arrangement, especially for higher-paid employees. Time off is not expressly provided as an alternative for payment for overtime in workdays, and prevailing views hold that overtime pay must be paid unless the employer and employee mutually agree otherwise. Employers should retain documentary evidence of any such agreement, such as a signed request for time off or a written waiver of objections to wage payment. These policies and procedures are best designed by an attorney with expertise in employment law.

If you need help with employment issues in China, ask CBL to help connect you with a qualified attorney.

FURTHER READING

Get more insights about Chinese employment law:

• China Work Hour Schedule Types and Overtime

For a general overview of this topic, see also CBL’s China Employment Law FAQ.

Footnotes

[1] Supreme Court Work Report (2024), (最高人民法院工作报告——2024年3月8日在第十四届全国人民代表大会第二次会议上), (Supreme Court, Mar. 8, 2024), (in Mandarin)

[2] State Council Employee Work Hour Rules, (国务院关于职工工作时间的规定), (State Council, Mar. 25, 1995), (in Mandarin)

[3] Employment Dispute Law Application Meeting Minutes (Beijing Employment and Social Security Department and Beijing Upper Appeals Court), (北京市高级人民法院、北京市劳动争议仲裁委员会关于劳动争议案件法律适用问题研讨会会议纪要), (Beijing Upper Appeals Court and Beijing Labor Dispute Arbitration Commission, effective Aug. 17, 2009), (in Mandarin)

[4] Beijing Wage Payment Rules, (北京市工资支付规定), (Beijing Municipal Government, Nov. 23, 2007), (in Mandarin)

[5] Employment Rights Oversight Regulations, (劳动保障监察条例), (State Council, Nov. 1, 2004), (in Mandarin)

[6] Shanghai Business Wage Payment Procedures, (上海市企业工资支付办法), (Shanghai Municipal Human Resources and Social Security Department, Jun. 27, 2016), (in Mandarin)

[7] Shenzhen Municipal Administrative Regulations on Employee Wage Payment, (深圳市员工工资支付条例), (Shenzhen Municipal People’s Congress Standing Committee, Oct. 28, 2004), (in Mandarin)

[8] Tianjin Alternative Work Schedule Business Permit Management Rules, (天津市特殊工时工作制行政许可管理办法), (Tianjin Municipal Human Resources and Social Security Department, Apr. 29, 2018), (in Mandarin)

[9] Employment Mediation and Arbitration Act (中华人民共和国劳动争议调解仲裁法), (Ministry of Human Resources and Social Security, Jul. 18, 2022), (in Mandarin)