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PRC Labour Law - Bitesize

19 June 2013
Mayer Brown JSM Newsletter

Wages, Overtime and Compensation (Cont'd)

What additional entitlements does a female employee have to maternity leave for childbearing at a later age?

When a married female employee gives birth to her first baby at the age of 24 or older, or becomes pregnant after she has married at the age of 23 or older, certain local rules provide that the female employee will be entitled to a certain number of additional days of "late" maternity leave (generally 30 days, depending on local rules).

How do you calculate the employee's salary during maternity leave and late maternity leave?

A female employee must be paid not less than her normal salary during her maternity leave and late maternity leave.

However, provided that the employer has contributed to the mandatory maternity insurance, the female employee is entitled to the maternity allowance (i.e., the equivalent of the leave pay) sponsored by the maternity insurance fund. Where the employee's normal salary is higher than the above maternity allowance, the employer is liable to pay the difference between normal salary and the payment under the maternity insurance fund.

If a female employee gives birth to a second child and has violated the PRC's family planning policy, is she still entitled to maternity leave and late maternity leave?

No, she is not entitled to the maternity leave entitlements. In practice, the employer may on a discretionary basis provide the employee with some time off. In some cities, the local courts may even hold that the employer is entitled to unilaterally terminate the employment of a female employee if she has violated the family planning policy which is also in serious violation of the explicit internal policy.

Must I pay overtime pay to my employee if I ask him/her to work more than 8 hours per day and 40 hours per week?

It depends on which type of working hours scheme applies to the relevant employee's job position.

Three types of working hours schemes are implemented in the PRC:

  • Standard Working Hours Scheme (i.e., 8 hours per day, 40 hours per week and at least one rest day per week);
  • Flexible Working Hours Scheme; and
  • Comprehensive Calculation Working Hours Scheme.

Generally speaking, an employee who is covered by the Standard Working Hours Scheme is entitled to overtime pay if he or she is required to work more than 8 hours a day and 40 hours a week. However, for an employee who is subject to the Comprehensive Calculation Working Hours Scheme, he or she is only entitled to overtime pay when the actual accumulative working hours exceed the aggregate hours under the Standard Working Hours Scheme (i.e., an average of 8 hours per day and 40 hours per week) within a prescribed time period. An employee under a Flexible Working Hours Scheme is not normally entitled to overtime pay.

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