11 February 2010
How much do I need to pay to my employees in the PRC?
There is no restriction on the amount which an employer can pay its employees, provided that the employee’s monthly rate (or hourly rate if the employee works on a part-time basis) must not be lower than the relevant minimum wage.
The minimum wage level varies from region to region, and may be increased from time to time. At the end of 2009, the minimum wage levels varied between RMB480 and RMB1,000 per month for full-time employees and between RMB4.7 and RMB9.6 per hour for part-time employees.
Are employees on leave covered by the minimum wage legislation?
Basically, the answer is yes when an employee is taking statutory leave. Sick leave pay is an exception, where the minimum pay is generally 80 percent of the minimum wage depending on local practice.
However, where the employee is taking leave other than that required by the legislation then the minimum wage legislation will not apply.
Do I have to pay a 13 month salary or end-of-year bonus to my employees in the PRC?
While PRC employers often, in addition to monthly salary, provide employees with a 13-month payment or an end-of-year bonus (which is usually paid at the end of the calendar year or before the Chinese Lunar New Year), this is not a statutory requirement.
Can I pay a "discretionary" bonus to my employees in the PRC?
It is possible to describe a bonus as "discretionary". However, such description alone may not be sufficient for a court to determine that an employer can refuse to pay such bonus. A court will consider past practice and the reasonableness of the employer’s actions in determining an employee’s entitlement to a bonus.
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