Employment & Labor

it is not supposed to be legal, but it is when you get a certain amount of pay per week for 40 hours, if you work over forty hours, they divide your base pay by the total number of hours worked lets say 60 (so thats 20 hours of overtime). That gives then an hourly rate at whcch they are going to pay you for the overtime hours. Most places pay time and a half for overtime, but chinese overtime, you get much less.
Contract, titled Labor Contract Law of the People's Republic of China outlines employment categories such as types of contracts and contract obligations, definitions of employment, labor rules and regulations and legal liabilities.

The contract sprang from surveys that showed large numbers of employees lacked formal labor contracts and from reports of rampant cases of wage default and forced labor. Typically, overtime in China is defined as a workweek that exceeds 40 hours. Wages are generally time-and-a-half or doubled. According to the All-China Federation of Trade Unions, the contract was adopted in order to strengthen China's economy, the protection of its citizens and the regulation of workplace conduct.

General Rules

  • Employers are bound by all work quotas outlined in the labor contract. Should an employee work past this time limit, she must be compensated with overtime with wages that are in compliance with the state. Employers don't have the right, under the policy, to force an employee to work overtime either explicitly or by disguising actual hours worked and manipulating rules and regulations. The People's Republic of China's policy calls for strict adherence to these work quotas, and outlines that any overtime must be arranged with and agreed to between both parties.

    Employer Obligations

  • Any employer who administers overtime must adhere to the following standards: State labor laws pertaining to working conditions must be followed; job requirements and wages must be discussed up front; overtime wages, benefits and performance bonuses must be provided; employees must be properly trained to handle the conditions and skills sets required for overtime work, in the case that overtime work becomes long term, the employee's salary scale must be adjusted accordingly.

    Other Circumstances Requiring Overtime

  • The labor administrative department can require an employer to pay overtime based on circumstances other than the amount of hours worked. Employers must pay these overtime wages or face economic compensations within a time limit given by the department. If this wage happens to be lower than local salary, the employer must pay the shortfall. Employers who don't meet the deadline requirements will be ordered to pay an extra compensation at a rate of time-and-a-half or double. These circumstances in which overtime is required are outlined as follows: The employer fails to compensate an employee with full wages as outlined by the contract or the state in a timely manner; the employer pays a worker less than minimum wage; the employer arranges overtime work but fails to pay overtime wages; or an employee is terminated or discharged and not given proper severance in accordance with the law.
  • China's Labor Contract Law (which law applies to every employment relationship in China) is very clear: employers must pay their employees for overtime.

    Though there are some exceptions, these exceptions are not nearly as broad or as easy to obtain as is widely believed.

    Overtime payments are 150 percent for each overtime hour worked on a normal work day, 200 percent for each overtime hour worked on a day off, and 300 percent for each overtime hour worked on a statutory holiday. China considers forty hours per week as generally considered standard.

    Though high level management and other staff can be considered exempt from overtime pay, to be so, prior government approval is typically required. To make matters even more complicated, local regulations definitely can vary on what constitutes an exempt employee and what is required by way of approval.

    My firm has handled around a half a dozen cases where foreign companies came to us after having been sued for having failed to pay overtime. In every single instance, our advice and eventual action was to settle the claims because they were all valid. Interestingly, despite all of them having been valid, we were able to settle them for considerably less than full value because the employees were so desirous of getting a lump sum payment and fast.

    I thought of these cases today after a reader sent me a China Daily article entitled, "Labor Disputes Skyrocket in Beijing." The article talks about how "about 80,000 [Beijing] workers had been involved in disputes with their employers by the end of November, double the number of last year" and up from 26,000 disputes in 2007. The article then noted how "about 50 percent of the cases were related to overtime rates and payment" and the reader asked me if I had been seeing the same thing elsewhere in China with respect to foreign employers.

    My answer was, "Yes." Employees and ex-employees are suing their foreign employers in China way more now than just a few years ago and most of those lawsuits are stemming from a failure to pay overtime, a failure to pay sufficient wages without a written contract, or from a termination not provided for in the employee manual. We are finding these cases very easy to settle at a fairly reasonable cost, but virtually all of these could have been avoided with just basic care. There is no excuse for not paying overtime or not securing an exemption for your employees to whom you believe overtime is not necessary. There is also no excuse for not having a written contract with your employees or a written employment manual setting out the grounds for firing.

    Oh, and if you think the person you are paying is an independent contractor and not an employee, there is about a 99.9% chance you are wrong and that person is, in fact, an employee.

    What are you seeing out there?

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