Guaranteed minimum wages was legislated in the Labor Law of People’s Republic of China (“Labor Law”).
The Ministry of Human Resources and Social Security, a governmental department responsible for national labor policies, standards, regulations and managing the national social security, set the first minimum wage law on 1 March 2004 (“Minimum Wage Regulation” , referred to as the “Regulation”).
The Regulation defines the term of standard of minimum wages as “the minimum labor remunerations that shall be paid by the employer according to law under the precondition that the laborers have provided normal labor within the promissory working hours or within the working hours as prescribed in the labor contracts concluded according to law”. And the Regulation was made to “ensure the basic needs of the worker and his family.”
Under the Regulation one monthly minimum wage was set for full-time workers, and one hourly minimum wage for part-time workers. Each province, municipality and autonomous reign is allowed to set its own minimum wage according to the local economic conditions and living standards.
Shanghai, with RMB 2420 monthly minimum wage issued for 2018, has been on the top of the list, followed by Tianjin, Zhejiang and Beijing. The lowest one is below RMB 1500/month.
For the employers, when computing the salary for the staffs to meet the minimum wage standard, they need to pay attention to the items that shall be deducted according to law, including: (1) salary for overtime work; (2) subsidiary for night shift, high/low temperature or hazardous work environment; (3) welfare for employees provided by laws or national regulations. Regards “welfare for employees” however, the measurements different local governments took may vary. For instance Beijing and Shanghai both treated social insurance and housing allowance to be paid by employees.as welfare to be deducted, whereas Liaoning and Shanxi made the contrast explanation.
Given the Regulation provides that the minimum wage refers to the minimum remuneration under the condition that the employee provided normal work, what is the law if the employee is absent?
It depends on what situation the absence can be attributed to:
1) The employee is taking the paid annual leave, marriage leave, maternity leave, etc. entitled to by law. This scenario shall be regard as having provided normal work.
2) The employee is taking sick leave, and the employer is allowed to pay sick leave salary by law and policy of the firm. Then the sick leave salary shall be no less than 80% of the minimum wage.
3) The employee is absent or taking leave other than those provided by law or the firm’s policy. In such case the employer can refuse to pay for the same period, and the monthly income being lower than the minimum wage will not be an issue.
Another issue that an employer shall be aware is that the employment performance place’s criteria on minimum wage shall be referred to when the performance place is different from the employment contract execution place which is normally the place where the firm is located.
Suppose the employer fails to meet the minimum wage standard, the legal risk for the employer is not only replenishing the outstanding payment to the employee but also subject to a compensation equivalent to 50-100% of the outstanding payable.