China’s Employment Laws on Company Regulation, Working Hours, Leave, Shift work and Overtime Pay

From time to time we have foreign investment companies and expats in China asking us about company regulation, working hours, leave, shift work etc. Here is a collection of our Q&A for such questions.

Q1: What requirements must be met when we want to make company regulations?

A1: If you want your company regulation to have binding effect, you need to consult the opinions of the employees first and keep record of such consulting, and you need to distribute to employees and keep record of such distribution. Also, the regulation cannot violate the Labour law and the Labour Contract law of PRC.

Q2: Are there any special rules in China regarding how many Chinese citizens must work in a non-local company?

A2:No special rules we are aware of. We could double confirm with the district policy of your company's place of operation.

Q3: How about working hours in China?

A3: Article 36 of the Labor Law of the People’s Republic of China (2018 Amendment) (the ‘Labor Law’) provides that, employees should not work more than 8 hours per day, and should not work more than 44 hours per week.

Article 41 of the Labor Law sets down that the working time of employees could be extended for 1 - 3 hour per day with employee’s approval.

Q4: In what situation an employee may take a leave?

A4: In China there are regulation of leave, major types of leave include annual leave (depending on how many years the employee worked in the company), illness, and important personal issues (marriage, death of family members).

Q5: What are requirements for foreigners who can work in China?

A5: The company shall apply for work permit for the foreigners to work in China and the foreigners shall apply for residence permit after receiving work permit.

Q6: Can the company shift its employee’s job position?

A6: You can shift work if the employee has shown that he/she cannot handle his or her position, or if they agreed. Here we have a relatively complex regulation. You could combine the regulation with your KPI system.

Q7: How to calculate overtime pay?

A7: Pursuant to Article 44 of the Labor Law:

(i) employees working on legal holidays shall receive overtime pay of no less than 300% of their salary;

(ii) employees working on off-days without adjustment of work schedule shall receive overtime pay of no less than 200% of the salary;

(iii) save for (i) and (ii) above, employees who work overtime shall receive overtime pay of no less than 150% of their salary.