A. Minimum Wage
Link: http://www.molss.gov.cn/gb/ywzn/2006-02/15/content_106799.htm
China introduced its minimum wage system in 1996, with the primary goal of protecting workers. Labor officials from various cities consider the situations of their respective regions, decide upon the minimum wage level for their cities, and then review the system once every one or two years. Different standards between areas within a single province, municipality or autonomous region are permissible. The minimum wage level represents nothing more than a fraction of average normal wages, and generally applies to low-income laborers working at factories, particularly migrant workers who have left rural farming areas for the city.
The last minimum wage standard in Guangdong province was put into effect on April 1 2008. There are five salary levels in Guangdong province. The monthly minimum for Guangzhou is the highest at 860 RMB per month, and the lowest minimum wage level of 530 RMB per month applies to the province's underdeveloped areas. The hourly minimum wage standard is only applicable to non-full-time employees, such as those who work on an hourly basis and work for no more than five hours a day, and no more than 30 hours in a week. Companies should sign full-time labor contracts with those who work for more than 30 hours a week.
For working compensation of its employees, an enterprise should follow the principle of equal pay for equal work. Salary level of the enterprise should increase gradually on the basis of its profit growth. The minimum salary shall not be lower than the local minimum salary .
B. The Circular of Ministry of Labor and Social Security on Issues Concerning the Calculation of Monthly Average Working Hours for a Year and the Conversion of Wage Rates
Link: http://www.molss.gov.cn/gb/zxwj/2008-01/10/content_219005.htm
In accordance with the provisions of the Rules on Statutory Holidays for Festivals and Commemoration Days (Decree No. 513 issued by the State Council), the statutory holidays for all citizens have been increased from 10 days to 11 days. Accordingly, the prescribed Monthly Average Working Hours for a Year and the pro-rating method to calculate the wage rates for the employees shall be adjusted respectively as follows:
I. Calculation of Prescribed Working Hours
Annual working days = 250 days
Quarterly working days = 62.5 days/quarter
Monthly working days = 20.83 days/month
Calculation of Working Hours: 8 hours per day multiplied by the number of working days for a year, a quarter or a month.
II. Calculation of Daily Wage Rate and Hourly Wage Rate
The daily wage rate and hourly wage rate shall be calculated as follows:
Daily Wage Rate = monthly wage rate ÷ monthly paid days
Hourly Wage Rate = monthly wage rate ÷ (monthly paid days × 8 hours)
Monthly Paid Days = (365 days – 104 days) ÷ 12 months ＝21.75 days
III. The Circular on Issues concerning Annual and Monthly Average Working Hours and Wage Rate Conversion for the Employees (Document No. 8) issued by the Ministry of Labor and Social Security on March 17, 2000 shall be annulled simultaneously.
The following practices are recommended: |
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n Designate a person responsible for routinely verifying the effectiveness of the company's policies and procedures on working hours and compensation. |
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n Ensure each employee has been educated on the facilities policy and procedures on working hours and compensation (e.g. handbooks, meetings, courses, classes, postings, periodic notifications) |
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n Ensure labor contracts are inclusive of the terms and conditions of employee working hours and compensation. |
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n Ensure workers' time on the job is recorded accurately. (i.e. working time clocks, valid login sheets, time cards). |
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n Review time and payroll records to ensure clear and accurate compensation calculation. |
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n Ensure breakdown wage to show detailed items, such as allowance, deduction, basic salary, overtime compensation, leave payment, maternity payment, etc. |
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n Facility should keep documents to verify all legal benefits have been provided to eligible workers (i.e. paid annual leave application, maternity application, leave application, etc). |
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n All work, including overtime, must be recorded in the regular payroll record. Employers will not use hidden or multiple payroll records in order to hide overtime, to falsely demonstrate wages, or for any other fraudulent reason. |
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n All compensation must be paid in timely manner within thirty days or less as required by law. |
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