China Law Library

Wage Payment Temporary Rules

Contents

Wage Payment Temporary Rules

Wage Payment Temporary Rules – Supplemental Rules

Wage Payment Temporary Rules

Section 1 The purpose of these Rules is to protect workers’ rights to receive wages for their work and to regulate employer payment practices under the Employment Act of the People’s Republic of China.

Section 2 These Rules cover businesses and family proprietorships (hereafter collectively referred to as “Employers”) within the People’s Republic of China and the workers with whom they have an employment relationship.

Government agencies, public institutions, non-governmental organizations, and their employees shall also be subject to these Rules.

Section 3 “Wages” in these Rules means all forms of monetary compensation paid by an employer to a worker under an employment contract.

Section 4 “Wage payment” includes all wage components, the total amount of compensation, methods of payment, designated recipients, payment schedules, and atypical wage payments.

Section 5 All wages must be paid in legal tender. Payment in kind or in the form of securities in lieu of legal tender is prohibited.

Section 6 An employer shall pay wages directly to each worker. A worker unable to accept payment personally may designate a relative or another individual on their behalf.

An employer may entrust a bank to disburse wages on their behalf.

An employer must keep written records of all wage payments made to workers, including the amount, date, recipient name, and signature, for at least two years for auditing purposes. An employer shall provide each worker with a wage statement at the time of payment.

Section 7 Wages shall be paid on the date mutually agreed upon by the employer and the worker. If a scheduled payday falls on a holiday or a rest day, wages shall be paid on the nearest preceding business day. Wages shall be paid to workers at least once a month or on a weekly, daily, or hourly basis where such systems are in place.

Section 8 An employer shall pay a worker hired to work on a temporary assignment or complete a specific task at the conclusion of the assignment or task pursuant to the applicable contract or agreement.

Section 9 If the parties in an employment relationship agree to terminate or cancel an employment contract pursuant to law, the employer shall pay the full amount of wages owed in a single payment upon the termination or cancellation.

Section 10 A worker who lawfully performs any civic duty during scheduled work hours shall be deemed to have performed regular work for that period and shall receive regular wages from their employer. Civic duties include: exercising the legal right to vote or stand for election; attending meetings convened by county (township), district, or higher-level governments, political parties, labor unions, communist youth leagues, women’s unions, or other lawful organizations; serving as a court witness; attending conferences for model or exemplary workers; and fulfilling obligations as a labor union committee member pursuant to the Labor Union Act.

Section 11 An employer shall pay a worker wages during any period of annual leave, home leave, marriage leave, or bereavement leave pursuant to the standards specified in the employment contract.

Section 12 If business operations within a pay period are suspended for reasons not attributable to the workers, the employer shall continue paying workers the wages pursuant to the standards in their employment contract. If the suspension exceeds one pay period, the employer shall pay workers at a rate no lower than the local minimum wage standards for regular work completed during the suspension. Wages for workers who do not perform regular work during the suspension shall be processed pursuant to applicable China law.

Section 13 If an employer requires a worker to work in excess of the statutory standard working hours after the worker has completed the assigned units of work or tasks, the employer shall pay wages according to the following rates:

(a) No less than 150% of the worker’s hourly rate under the employment contract if the worker is required to work hours in excess of statutory limits;

(b) No less than 200% of the worker’s hourly rate under the employment contract if the worker is required to work on a rest day and the employer is unable to schedule compensatory rest days;

(c) No less than 300% of the worker’s hourly rate under the employment contract if the worker is required to work on a public holiday;

For workers paid on a piece-rate basis, any work required in excess of the agreed units of work shall be compensated at 150%, 200%, or 300% of the worker’s standard rate for each unit of work, subject to the above requirements.

For workers working under a fluctuating work hours plan approved by the labor regulator, any hours exceeding the non-overtime hours under the standard work hour plan shall be deemed overtime, and the employer shall pay overtime pursuant to the rates specified in these Rules.

These requirements do not apply to workers working under an irregular working hours plan.

Section 14 Workers are entitled to receive their wages if the employer is declared bankrupt under law. During post-bankruptcy liquidation, the employer must comply with the claim priorities set forth in the Business Bankruptcy Act of the People’s Republic of China and pay workers’ wages before other claims.

Section 15 Employers may not make unlawful deductions from worker’s wages. However, an employer may deduct the following from worker’s wages on their behalf:

(a) Personal income tax withholdings;

(b) Social Security contributions paid by the employer on the worker’s behalf;

(c) Child support and elder support mandated by court rulings and orders.

(d) Other expenses required to be deducted from worker wages pursuant to applicable laws.

Section 16 An employer is entitled to require the worker to pay indemnity for any financial damages incurred due to the worker’s fault pursuant to the employment contract. Such indemnification for financial damages may be deducted from the worker’s wages. However, the deductions must not exceed 20% of the employee‘s wages within the same month. If these deductions cause the employee’s wages to fall below the local monthly minimum wage, the employer must pay the employee at least the minimum wage rate.

Section 17 An employer shall convene a meeting with all employees or employee representatives to negotiate and establish an internal wage payment policy under these Rules, inform all employees of the policy, and file a counterpart of the policy with the local labor regulator.

Section 18 Labor regulators are empowered to oversee employer wage payment practices. Labor regulators shall order employers to pay wages and financial compensation, and may additionally order compensatory damages if they violate employee legal rights by:

(a) Making unlawful deductions from employee wages or delaying the payment of wages without a valid reason;

(b) Refusing to compensate employees for overtime;

(c) Paying employee wages at a rate less than the local minimum wage;

Financial compensation and damage amounts shall be determined pursuant to applicable Chinese law.

Section 19 Either party in a labor dispute concerning wage payments between an employer and an employee may submit the dispute to the labor arbitration agency for arbitration. A party dissatisfied with the arbitration award may file suit in the appropriate court thereafter.

Section 20 These Rules shall take effect on January 1, 1995.

Wage Payment Temporary Rules – Supplemental Rules*

The following supplemental rules were created to address specific matters under the Wage Payment Temporary Rules (Ministry of Labor [1994] No. 489, hereafter the “Rules”):

1 “Pursuant to the standards specified in the employment contract,” as provided in §§ 11, 12, and 13 of the Rules, refers to the wage standards for the position (role) specified in a worker’s employment contract.

As the institutionalization of employment contract practices is evolving, local or industry labor regulators unable to fully implement the Rules are authorized to issue temporary rules in line with the principles provided in the Rules.

2 Overtime Pay Issues

A. Wages for work performed beyond statutory standard working hours, on days off, or on public holidays shall be paid based on the amount of overtime worked and the rates specified in the employment contract, pursuant to § 13(a), (b), and (c) of the Rules. If an employer schedules overtime work in excess of statutory standard working hours or on rest days without providing compensatory time off, the employer must pay no less than 150% or 200% of the regular hourly or daily wage specified in the worker’s employment contract. For work scheduled on public holidays, the employer must pay no less than 300% of the regular hourly or daily wage specified in the worker’s employment contract.

B. Proration of Worker’s Daily Wages Since labor standards, such as units of work, are tied to standard working hours, daily wages are calculated by dividing the worker’s monthly wage by the number of standard working days in a given month.

Standard work hours under Chinese law are set at 40 hours per week and 8 hours per day, for a total of 21.5 standard workdays per month. Under national law, businesses unable to implement the 40-hour standard workweek are granted a grace period until May 1, 1997, during which those following a 44-hour workweek may calculate daily wages using 23.5 workdays per month.

3 “Unlawful deduction” in § 15 of the Rules means any deduction from wages owed to workers made by an employer without a valid reason. (i.e., If workers perform their regular work, employers must pay the full compensation and benefits specified in the employment contract). However, it does not include the following wage deductions:
a. Deductions explicitly required under national law;
b. Deductions explicitly provided in a lawful employment contract;
c. Deductions authorized under a lawful company policy approved by a meeting of employee representatives;
d. Performance-based deductions reflecting reduced company financial performance (provided that wages actually paid are not lower than the local minimum wage); or
e. Deductions for such reasons as unpaid personal leave.

4 “Delaying payment of wages without a valid reason” in § 18 of the Rules means an employer’s failure to pay wages by the agreed deadline without a legitimate reason. This does not include:
(a) failure to pay wages on time due to force majeure events, such as natural disasters or wars; or
(b) delays authorized by the employer’s labor union in response to operational or cash-flow difficulties, with deadlines set by provincial, autonomous region, or major home rule city labor regulators. All other delays shall be deemed unjustified.

5 Wage Payment for Specific Workers

  1. Payment of wages for workers subject to criminal or administrative penalties shall be made pursuant to applicable Chinese law for:
    (a) Workers who remain employed following disciplinary action (e.g., demotion or being placed on probation in the same position) or who are rehired upon completing a criminal sentence; and
    (b) Workers subject to criminal penalties, including those arrested pending investigation and those in detention (custody) or serving sentences of probation, supervised release, or penal labor.
  2. Wages for apprentices, journeymen, and vocational education graduates going through an apprenticeship, continued training, job placement, or probationary period, as well as graduates in the process of becoming regular employees, shall be determined at the employer’s discretion.
  3. Wages for newly hired discharged military personnel shall be determined at the employer’s discretion. Wages for discharged military personnel assigned to businesses shall be processed pursuant to applicable Chinese law.

*The translation reflects the context and conditions as of the original issuance date. References to laws, policies, or circumstances should be understood within that timeframe.

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This article was translated into American English from the following government publication:
“工资支付暂行规定”
https://www.mohrss.gov.cn/xxgk2020/gzk/gz/202112/t20211228_431557.html

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