China: DaHui Labor And Employment Law Monthly Update

Last Updated: 8 January 2017
Article by Patrick Gu

LABOR COMPLIANCE & SUPERVISION

Attention Degree: ☆☆☆☆☆

State: The Ministry of Human Resources & Social Security (MOHRSS) released the Interim Measures for Publicizing the Acts in Material Violation of Labor Protection Laws (Draft for Comments)

On 22 June 2016, the MOHRSS released the Interim Measures for Publicizing the Acts in Material Violation of Labor Protection Laws (Draft for Comments) (Draft). The Draft further interprets the circumstances for publicizing material violations under Article 22 of the Regulations on Labor Security Supervision. Under the Draft, the following eight categories of employer violations relating to labor security should be publicized (if the relevant cases have been closed):

  • Employers who make deductions from or delay payment of employees' labor remunerations without cause, which results in collective petitioning and other mass disturbances or extreme events; or are suspected of refusing to pay labor remunerations and are transferred to the judicial authorities for investigation of criminal liability;
  • Employers who fail to purchase social insurance or pay social insurance premiums in accordance with law, which results in serious consequences;
  • Employers who illegally hire or recommend child labor, which results in serious consequences, such as the disability or death of a child labor;
  • Employers who violate the provisions on working hours, rest and leave, which seriously harms the health of employees or results in the death thereof;
  • Employers who violate the provisions on special protection for female and minor employees, which results in serious physical and mental damage and other consequences;
  • Employers who receive an administrative penalty imposed by the administrative departments of human resources and social security relating to labor protection, and they meet the conditions for filing a hearing;
  • Employers who commit any other violations relating to labor protection other than back payment of labor remunerations, which results in the collective petitioning of more than 30 people and other mass disturbances or emergencies that cause adverse social influences; and
  • Employers who commit other acts that materially violate labor protection laws specified in laws, regulations and rules.

The information publicized should include the full name, registration number and address of the illegal entity, the name of its legal representative or person in charge, facts regarding the illegal acts and related punishments.

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Highlights: Pay attention to labor, employment and social security compliance in order to avoid incidents that could cause damage to enterprise reputation.

Shanghai: Measures for the payment of wages by enterprises have been amended

On 27 June 2016, the Shanghai Municipal Human Resources and Social Security Bureau (SMHRSSB) issued the new Measures for the Payment of Wages by Enterprises in Shanghai Municipality (Hu Ren She Zong Fa [2016] No. 29) (New Wage Measures), which will be implemented starting 1 August 2016.

The New Wage Measures clarify some vague issues in previous practices:

  • The wage includes the hourly wages, piece-rate wages, bonuses, allowances, subsidies and overtime wages etc.,
  • In the event that the employment contract specifies the monthly wage of the employee, the calculation basis for overtime and leave wages shall be the employee's regular monthly wage, excluding the year-end bonus, commuting allowance, meal allowance, housing subsidy, night shift allowance, high-temperature allowance, overtime wage and other wages paid under special circumstances;
  • If neither the employment contract nor the collective contract specifies the monthly wage of the employee, the calculation basis for overtime and leave wages shall be 70% of the employee's regular monthly wage (excluding overtime wages) based on Section 2 of the New Wage Measures;
  • As for employees who participate in social or enterprise organized celebrations or work as usual during Women's Day, Youth Day or other such holidays for a certain group of citizens, employers shall pay wages but not overtime wages. If such holidays fall on rest days and the employer requires employees to work without compensation leave, the employer shall pay no less than 200% of the hourly or daily wages to the employees;
  • Where an employment contract cannot be performed due to detention of employees for suspected crimes or other objective reasons, the employer is not liable to pay wages, unless otherwise required by laws and regulations or as agreed between the employer and the employee; and
  • If the employer terminates the employment contract with the employee, but the decision is rescinded by a competent labor dispute arbitration commission or people's court, and the two parties reinstate the labor relationship, the employer shall pay the employee wages for the time periods covering mediation, arbitration and the litigation proceedings.

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Highlights: Wage payment provisions in Employment Contracts and Employee Handbooks should be reviewed based on the New Measures. Pay attention to the calculation base of the overtime and leave wages.


COMPENSATION & BENEFITS

Attention Degree: ☆☆☆☆☆

Beijing: Beijing released the 2015 annual average wage of employees

On 3 June 2016, the Beijing Municipal Human Resources and Social Security Bureau (BMHRSSB) and the Beijing Municipal Bureau of Statistics jointly issued the Notice on the Publication of the Average Wage of Employees in Beijing for 2015, revealing that the annual average wage of employees in Beijing in 2015 was RMB 85,038 and the average monthly wage was RMB 7,086.

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Beijing: Maternity leave has been extended and late childbirth leave is cancelled

On 1 June 2016, the BMHRSSB released the Notice on Adjustment to Policies concerning the Maternity Insurance of Employees in Beijing (Notice on Maternity Policies), which states that 30 days of maternity leave have been added, together with the existing maternity allowance, and the 30-day late childbirth leave plus its allowance are now cancelled. The Notice on Maternity Policies was implemented on 24 March 2016.

An insured that gave birth after 1 January 2016 and has received the maternity allowance for late childbirth leave in accordance with the previous regulations will no longer enjoy the allowance for the extended maternity leave. The maternity allowance for late childbirth leave and that for the extended maternity leave shall not be enjoyed cumulatively.

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Shanghai: The maximum and minimum contribution premium for the monthly housing fund payment has been adjusted

Starting 1 July 2016, the maximum contribution premium for the monthly housing fund payment will be RMB 2,494 and the minimum contribution premium will be RMB 282. The maximum contribution premium for monthly payment of the supplementary housing fund is RMB 1,782.

The housing fund payment basis for new employees who worked from 1 January 2016 shall be the monthly wage of the second month or the average monthly wage after he/she has been employed. The housing fund payment basis for newly transferred employees from 1 January 2016 shall be the wage of the month that he/she is transferred or the average monthly wage.

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Shenzhen: Adjusts Social Insurance Premium Contribution Basis and Compensation Repayment Basis for 2016

On 15 June 2016, the Shenzhen Social Insurance Fund Management Bureau released the Notice on Shenzhen's Adjustment of Social Insurance Premium Contribution Basis and Compensation Repayment Basis for the Year of 2016. For 2015, the average annual salary of employees in Shenzhen was RMB 81,034, which is equal to RMB 6,753 (rounded) per month. For the period starting 1 July 2016 and ending 30 June 2017, the social insurance premium contribution basis and the compensation repayment basis, which refers to the average monthly salary of employees in Shenzhen last year, shall be RMB 5,525 per month and RMB 6,753 per month, respectively.

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Highlights: Pay close attention to the adjustment of average social wages, the social insurance premium contribution basis, the maximum and minimum of housing fund contributions and the cancellation of late maternity leave; relevant contents in the employee handbook and rest/leave policies should be updated.


TRADE UNION & COLLECTIVE BARGAINING

Attention Degree: ☆☆

Shanghai: Shanghai Federation of Trade Unions "Locks Down" 35 Problematic Enterprises for Labor Law Violation Oversight

It was reported on 20 June 2016 that the Shanghai Federation of Trade Unions has begun to lock down enterprises that severely infringe upon the rights of employees' in collective labor disputes and will conduct limited-time supervision and periodic supervision over these problematic enterprises on a quarterly basis.

Thirty-five problematic enterprises have been locked down so far. For enterprises that refuse to make changes, the Shanghai Federation of Trade Unions says it will use Trade Union Labor Law Supervision Opinion and Trade Union Labor Law Supervision Recommendation to force their compliance.

Highlights: Trade Unions can legally supervise an employer's compliance with labor law and regulations. The Shanghai Federation of Trade Unions has taken various measures to oversee enterprise labor disputes, especially collective labor disputes. We suggest that related enterprises avoid and prevent any collective labor disputes.


IMMIGRATION & RESIDENCE

Attention Degree: ☆☆

State: Regulations of People's Republic of China on Administration of Permanent Residence of Foreigners (Draft) Released for Comments

The Ministry of Public Security published the Regulations of People's Republic of China on Administration of Permanent Residence of Foreigners (Draft) (Permanent Residence Draft) on June 7 for public comments. The comment period ends on July 8.

According to the Permanent Residence Draft, applicants who satisfy one of the following conditions may submit an application for permanent residence:

  • Teaching and scientific research staff, innovation team members, technical specialists and managing staff employed by qualified schools, science institutions and innovation enterprises, who have worked in China for 4 consecutive years (during which the aggregate stay period is no less than 1 year) and maintained good tax records and social credit records;
  • Applicants who have worked in China for 4 consecutive years, during which the applicant's annual stay period is no less than 6 months, with annual income in the form of wages and the amount of tax payment reaching required standards, and who have also maintained good social credit records;
  • Foreigners who have invested in certain regulated fields in China with the duration and amount of investment, number of Chinese citizens employed and amount of tax payment reaching required standards, and who have also maintained good social credit records.

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Shanghai: First Internship Work Permit Issued for Foreigners

On 20 June 2016, the SMHRSSB Job Promotion Center issued the first Foreigner Work Permit, which has a note of "internship", to an international student from France. This is the first time that Shanghai has opened itself to foreign students for internships.

Enterprises located in China that are willing to accept French interns should submit applications at provincial or municipal level human resources and social security agencies. After which, enterprises must fill out a foreigner work permission application form and submit the required materials. French interns can apply for Residence Permits for Foreigners by presenting their Foreigner Work Permit with a note of "internship" and a Z Visa.

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Highlights: French students interning at Chinese enterprises may apply for a special "internship" work visa.


PRIVACY & DISCRIMINATION

Attention Degree: ☆☆☆☆

Guangzhou: Company's Publication of its Employee's Hepatitis B Condition Infringes upon the Employee's Privacy Right

It was reported on 12 June 2016 that the Guangdong Province Guangzhou Baiyun District People's Court held that a company's publication of its employee's Hepatitis B condition infringed upon such employee's privacy right. The employee went through an employee physical examination arranged by the company and received a positive HBsAG test report, which was subsequently sent by the examining hospital directly to the company. When the company noticed that the employee was infected with Hepatitis B, it published such information, which resulted in unjust discrimination against the employee.

The employee sued the company for infringement of his privacy right. The court held that the company infringed upon the privacy right of the employee and inflicted emotional distress. The court held that the company must issue a written apology and compensate the employee RMB 5,000 for emotional distress.

Highlights: According to the Notice on Further Standardizing the Physical Examinations for Educational Enrollment and Employment to Protect the Right of HBsAg Carriers to an Education and Employment issued by MOHRSS, unless requested by the examined individual, the physical examiner should not perform a Hepatitis B test or ask the examined individual if he/she carries HBsAg. Excepting those for certain special occupations, whose health condition is allowed to be published by the Ministry of Health, physical examinations should not include a Hepatitis B test. The employer should not decline employment, recruitment, or terminate employment of an employee based on the fact that such worker carries HBsAg. All Hepatitis B test reports should be sealed, only opened and reviewed by the examined individual. No employer or individual is allowed to review the physical examination report of others.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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