Next week brings Chinese New Year, also known as Spring Festival, which is the most important holiday in Chinese cultural tradition. During this holiday, large cities such as Beijing and Shanghai empty, with people going back to small cities and villages across China to spend the holiday with family. The holiday brings 7 official public days off work; however, many industries require employees to remain on the job over the holiday period.
A client recently contacted our Shanghai Law office, and explained that due to special circumstances this year, certain employees will need to remain working on an urgent ongoing project through the holiday. As this client has several branch offices in different cities around China, and the employees to remain working over the holiday are spread through these branch offices, calculation of required overtime compensation is not straightforward. What’s more, a few of these employees are registered under China’s flexible working hours category adding extra confusion as to what the legal requirements for compensation for work over the holiday will be.
Calculating overtime wages due is an area that is affected by both national and provincial level law and regulations. Generally, an employee which is required to work over a public holiday is entitled to overtime wages of at least three times the employee’s standard daily or hourly wage.
For employees under a flexible working hours scheme, which must be registered as such with the local Labor Bureau we must look at local regulations from the Labor Bureau and Social Security Bureau to make a determination as to whether they are entitled to the 300% salary rate.
Let’s take Beijing and Shanghai for example, in Shanghai a company shall pay standard overtime wages (300%) each employee for time spent working over the public holiday, however in Beijing, employees on a flexible working hours system are not entitled to the 300% percent compensation (though the company may still pay at this level if desired).
Confirming local rules and regulations is an important part of many areas of China legal practice. Such rules and regulations often vary widely from province to province and city to city. The overarching national laws are not always the best place to seek final answers. A China lawyer will conduct all relevant local research to ensure you are compliance with both national and local laws, policies and regulations.