Chinese labor law provides sick leave rights to employee, including their social security benefits and continuing rights under their employment contract. Nonetheless employees’ rights to take sick leave is limited by the regulations found in Business Employee Illness or Other Non-work Injury Medical Leave Rules. Legal protection for genuinely ill employees is strict, but the law does not provide any privilege for bad faith sick leave. This article will discuss the specific rules and court cases in China that have looked at sick leave disputes.
Contents
Employees who don’t follow company process
Preventing employees from abusing sick leave policy
Chinese law on sick leave is both national and local
First, Chinese law has a specific definition for medical leave but makes no mention of the colloquial workplace concept of ‘sick leave.’ Under the Rules, “medical leave” means a period of time where the employee does not work due to illness or a non-work-related injury; during this period of time, an employer cannot terminate the employment contract.
Chinese law protects employees on medical leave from termination except for negligence and also from layoffs. (See China Employment Contract Act Sections 40-41)
Medical leave is different from “sick leave,” which is an HR term not used in the current China employment law, but the distinction is important because managers often confuse the two. In practice, lawfully obtaining medical leave will involve making a sick leave request through HR. Employees who require taking additional sick leave after the medical leave period ends may be terminated with 30 days written notice, but some other conditions apply:
- The employee cannot perform the job after the medical leave period expiration;
- The employer provides other work opportunities, but the employee cannot do that job either;
- Company policy does not otherwise permit taking sick leave.
If the employee completes the sick leave approval procedures and is able to furnish genuine and appropriate documentation of illness that satisfies company policy requirements, sick leave should not be denied. Typically, an expert would be needed to set up a compliant HR process and periodically audit for its legal compliance. Consider asking CBL to help you find a lawyer who can handle these issues for you.
Central government regulations set a minimum medical leave period, above which the local government will often have its own local law providing different rules. In general, employees with less than 1 year of service are entitled to 3 months’ medical leave, and each additional year of service adds an additional month up to a maximum of 24. Shanghai’s medical leave rules use a table of medical leave allowances based on years of service, which reduces employees’ ability to collect long-term benefits for sham sick leave.
The medical leave period commences from the first day on which sick leave is taken and the sick leave is cumulative. (See Ministry of Labor Circular No.236 (1995)) For example, an employee is entitled to 3 months’ medical leave and requests sick leave for the first time on March 5. Under the rules, the medical leave may accumulate up to three months during the time period between March 5 to September 5. Holidays and rest days are included in the medical leave period.
Let’s consider a general example how to calculate how many medical leave days are permitted under the rules, in a situation that often confuses employers.
Suppose that an employee takes sick leave on 2/1/2025 for 12 months during an 18 month actual period, and prior to 8/1/2026 has actually accrued 12 months of leave taken. The employee has taken 12 months leave prior to 9/20/2026, but for the period ending 8/1/2026, the sick leave accrual is less than 12 months.
Analysis:
The employee has not used all of their medical leave days, therefore for the next medical leave, they will apply a new medical leave accrual period, so the employee can continue taking medical leave. Many managers will violate the law in this context by thinking that the employee has already taken 12 months off in the past 18 months, and therefore used up all of their medical leave days. Terminating an employee on these grounds would violate China Employment Contract Act 40(a), and the employer could be liable for damages.
Below, we’ll look at how local governments have modified their medical leave rules.
Shanghai
The local rules are established in the 2004 Shanghai Department of Employment Security Sick Leave Calculation Circular. For sick leave or off the job injuries under 6 months, Shanghai uses a sliding scale for medical leave, running from 60% of the wage rate for new (2-year or less) employees and 100% for long term workers(8+ years). For illness or off the job injury recovery periods, an illness relief payment is due, Also on a sliding scale ranging from 40% for new employees, up to 60% for employees with 3 or more years of tenure.
Shanghai’s sick leave wages and relief payment requirements are not inclusive of other social security payment requirements such as retirement benefit, health insurance, unemployment, and housing fund.
Beijing
The Beijing Wage Payment Rules Section 21 provide that an employee who has an illness or off the job injury must pay wages pursuant to the employment contract or collective bargaining agreement. Moreover, the contract sick leave pay rate may be no less than 80% of the Beijing minimum wage.
Employees who are ill but do not comply with company policy provisions
Most companies have specific procedures to request sick leave, and these are usually in company policy and the employee handbook. An employee who missed work due to illness but doesn’t make a time off request or is late in doing so can detriment business performance. But since the employee is genuinely ill, Chinese courts ruling on such disputes will generally not enforce, or only partially enforce, company policy requirements to complete procedures to take medical leave. Companies who discipline or terminate their employees solely on the basis of failure to complete sick leave request procedures will face significant legal risks.
In Hui Civil Appeal No. 7161, Song was injured in a traffic accident and called his supervisor Wang to provide notice of the injury and need for hospitalization. Song did not complete the formal leave procedures, so the employer terminated his employment contract for absenteeism. The court held the termination unlawful, beause Song provided effective notice of the accident and there was no absenteeism, and the leave did not constitute a serious company policy violation.
China’s legal system emphasizes protecting the interests of workers. An employee who has used up their remaining vacation and sick leave days is nonetheless required to pay sick leave wages. This implies a double cost, as the employer needs to find a replacement during that period while paying wages for the sick employee. The law nonetheless limits the ability of a worker to receive wages for perpetual sick leave requests.
Under the Medical Leave Rules, an employer may use the “personal leave” classification in response to a sick leave request by an employee who has used up their medical leave days. Employment Contract Act Section 40(a)(1) provides that an employer is entitled to terminate any employee who is unable to work due to continued illness after using up their medical leave days.
Under these conditions, an employer may unilaterally terminate the employment contract. The employer may not independently make the Section 40(a)(1) determination, rather they must first seek a medical and disability evaluation by the local labor commission, as required by Medical Leave Rules Section 6. The employer faces significant legal risks if they do not ground their termination decision in the evaluation result.
In Beijing 2nd Appeal Court Case 09208, at the end of Guo’s medical leave period, the employer demanded he get an employment medical evaluation within 7 days, but Guo did not do so within the required time period, and was terminated as a result. The court held that the employer unlawfully terminated the employment contract. A key fact in its analysis is that the employer did not provide a receipt confirmation for the letter sent to Guo.
In some cases, the employee will simply refuse or neglect to do their health evaluation, so to be prepared for a potential court dispute, you should collect evidence of the employee’s refusal to do a health evaluation prior to terminating their employment contract. In Beijing Civil Appeal 01-1735, Wei took medical leave and on its expiration the employer arranged for him to transfer to a different position, making written requests for Wei to return to work, which Wei ignored, and the employer then wrote a letter requesting Wei obtain a health evaluation from the labor commission. Wei also ignored this request, resulting in the company terminating Wei’s employment contract in writing. In view of this process, the court held that the termination was lawful.
Employees faking sick leave
In China, sick leave requests must typically be documented with a doctor’s note affixed with the seal of the health facility. Employers usually authorize the sick leave request if they see the documentation and will not verify its authenticity with the healthcare facility. The typical practice makes it easy for employees to fake sick to take time off work. Faking sick detriments business performance, amounts to wage theft, and erodes trust colleagues have in those employees. Fortunately, companies have the capability to investigate the truth of the situation and prevent employees from faking sick.
In Beijing 2nd Appeal Court Case 07324, Li took sick leave with a doctor’s note from a maternity hospital, and tested the authenticity of the long absence by sending a parcel to her address. It was rejected with a note saying that the recipient is currently abroad, with a request to contact her by phone. The employer felt that this was unusual for a patient allegedly resting at home, so the employer asked Li to get a second diagnosis, which Li refused to do. Management concluded that Li is actually providing faked health documentation to achieve wage theft, and concluded it constitutes a major company policy violation. The employer terminated Li’s employment contract with written notice four months later, on grounds of falsifying sick leave documentation and absenteeism.
On appeal, the court exercised its inquisitorial system authority to obtain copies of Li’s border crossing records which showed that during the four months of sick leave, she was actually traveling in America, and the dates matched up almost exactly with the doctor’s note. When questioned in court, Li was unable to offer a reasonable explanation for traveling during these exact dates. The court held that the employer lawfully terminated Li because she acted dishonestly. The Li case stands for the proposition that an employee who fakes sick leave may be terminated for violating company policy.
Compliance tips for preventing employees from abusing sick leave policy
Company management should include detailed provisions about the sick leave request process directly in the company policy or employee handbook, covering the manner in which it is requested, documented, and approved. If the employee does not follow the policy, they should be subject to discipline, and management’s decision will be backed by evidence.
Use a different sick leave process and documentation requirements for different sick leave length requests. A one-day sick leave request can be supported with a simple doctor’s note and health facility visit receipt. For longer sick leave requests, consider adding additional documentation requirements, such as the prescribed medicine list, transit receipts, patient chart, and inpatient records. These can be used to reasonably prevent employees from faking sick to take paid time off. Employees should be disciplined reasonably for violating this company policy, but avoid characterizing the violation as absenteeism.
A common provision in China is to require the employee to visit a designated health care provider for a second opinion, or else face disciplinary action. The effectiveness of this approach in some contexts is limited however, because if the second opinion is different, it does not mean the first diagnosis is wrong. The judicial precedents indicate that an employee who provides a doctor’s note cannot reject it just because of a different second opinion. Many companies have in fact been penalized for disciplining employee absenteeism on the basis of a second opinion. Unlike the United States Family Medical Leave Act, Chinese regulations do not provide for a second or third opinion to be binding, instead, at best all they can do is confirm that the employee is actually sick, but not deny it.
Instead, a strategy that works for many HR departments in China is to require an authorization letter from the employee to visit the hospital to verify the authenticity of the doctor’s note with the health facility administrative office or the physician. A health facility in China will generally honor requests to search patient records to corroborate the authenticity of the doctor’s note. Prominent labor lawyers in China have spoken about their experience with HR managers investigating fake sick leave documentation at the hospital successfully, in which case they are able to obtain effective proof that an employee faked sick leave. While this may seem unusual, China has no statute specific to patient privacy that may dissuade this approach, and labor lawyers indicate that it currently works best.
Conclusion
In this article, we’ve learned that China has very strict rules governing how medical leave occurs. The employee is required to grant the medical leave and pay the employee for all of their eligible days, and can only terminate after the end of the period. Employees who don’t comply with company policy regarding sick leave may even be protected from termination despite neglecting process requirements. China’s pro-employee rules make it easy for employees to fake sick leave, potentially taking months off for what could be a paid vacation, and companies that resolved these issues poorly in the past have been forced to pay damages by courts. To protect yourself from employees who abuse sick leave, adopt robust company policy and employee handbook provisions that lawfully permit management to authenticate that the illness or injury is genuine. Typically, an expert would be needed to set up a compliant HR process and periodically audit for its legal compliance. Consider asking CBL to help you find an attorney who can handle these issues for you.
FURTHER READING
Get authoritative insights about this topic from a official government guidance translated by CBL:
For a general overview of this topic, see also CBL’s China Employment Law FAQ.