The issue of excessive overtime in Chinese export production has long been the subject of attention and concern, but the underlying reasons for this are very complicated.
Chinese labor laws recognize that a single regime for regulation of working hours, however desirable, cannot be universally applied. Taking account of the variety of work types in a modern economy, there are three categories of working hours in China: ‘standard working hours’ of 8 hours per day and 40 hours per week with overtime payments at rates of 150%, 200% and 300% for additional hours worked; ’unfixed working hours’; and ‘comprehensive working hours,’ with the last two often referred to together as ‘flexible working hours,’ although that is not an official category.
The Labor Law and the Provisions of the State Council on Working Hours of Employees have set down explicit requirements for overtime. Upon production or operation needs, an employing entity may consult with the trade union and employees on the extension of working hours, with the maximum daily overtime no more than 1 hour; if extension of working hours is needed due to special reasons, an employing entity may extend working hours for no more than 3 hours a day and no more than 36 hours a month, with the precondition of ensuring workers' health.
"Comprehensive working hours" are generally applicable to employees who have to work continuously and for longer periods due to the specific nature of their jobs, such as resource exploration, workers in remote places such as offshore oil platforms, construction and tourism. Each case must be individually examined and approved, and not all workers in the indicated industries automatically qualify. A reference period (a week, a month, a season or a year) is specified and the actual working hours are measured against this.
Employees may work for more than 8 hours in a specific day, or more than 40 hours in a specific week, but the average working hours during the reference period should not exceed the standard working hours. If they do, the excess (a maximum of 36 hours per month) will be overtime with payment of 150% (300% for statutory public holidays). All decisions to place employees on comprehensive working hour systems must receive approval from local labor administrative departments designated by provincial-level regulations.
The three categories of working hours permit a degree of flexibility in formulating employment policies, but the labor authorities will not permit employees to be placed outside the overtime regime applied to standard working hours without good cause. It is prudent to liaise closely with the relevant department when planning to introduce anything other than standard working hours, providing detailed justification for the use of unfixed or comprehensive working hours.
Generally, most multinational companies maintain good employment practices in China which comply with labor laws and regulations, but OT violations can be identified in manufacturing factories and suppliers, particularly in Hong Kong or Taiwan-owned factories. According to some survey and reports from 2006, the average working hours in CP (consumer product) factories totaled 75 hours per week.
Almost all multinational companies have codes of conduct to require their supplier’s working hours to comply with Chinese laws and regulations. However, most companies establish a limit of 60 hours per week and one day off for each seven-day period. Efforts to address these common non-compliance issues include periodic factory audits and evaluations by company compliance departments or 3rd parties.
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