Wages, Overtime and Compensation (Cont'd)

My employees are working under the Standard Working Hours Scheme (eight hours per day, 40 hours per week with at least one rest day per week). In order to earn more overtime salary, some ask to work more than 12 hours per day or six days per week. Can I legally agree to such a request?

You cannot agree to this request as it may expose you to certain risks. PRC Labour Law provides that an employee must not work overtime for more than three hours in a normal working day or 36 hours in a month. The proposal by the employee would exceed such a limit. In such a case, the relevant employees' agreement (or request) and your full payment of overtime salary may not release you from being warned and fined by the relevant labour authority (the fine is up to CNY500 per employee impacted).

What kind of work will be regarded as overtime?

An employee who is subject to the Standard Working Hours Scheme will be regarded to have worked overtime in any of the following circumstances:

  • the employee works in excess of eight hours in a normal working day (the Normal Overtime);
  • the employee works on a rest day (e.g., Saturday or Sunday) (the Weekend Overtime); and
  • the employee works on any public holiday (i.e., 11 days in a year, including the New Year's Day, the Spring Festival, the Tomb Sweeping Day, the Labour Day, the Dragon Boat Festival, the Mid-Autumn Festival and the National Day) (the Public Holiday Overtime).

How much must I pay for the above overtime work?

With respect to the Normal Overtime, you are required to pay at least 150 percent of the employee's normal hourly rate as overtime salary. The overtime rate is 200 percent and 300 percent of the employee's normal hourly rate for the Weekend Overtime and the Public Holiday Overtime respectively.

Can I avoid the overtime payment by providing time-off in lieu to the employee?

You can provide time-off in lieu for Weekend Overtime only. That means, for any Normal Overtime or Public Holiday Overtime, you must pay overtime salary even if you provide time-off in lieu.