According to the annual leave regulations issued last year, an employee working for a continuous period of 12 months is entitled to take paid annual leave; while the minimum annual leave entitlement depends on the cumulative working period with any employer. However, it is unclear whether the continuous 12-month period includes the employee's service period with any employer, or only the current employer.
In April, the PRC Ministry of Human Resources and Social Security ("HRSSM") has made it clear that the employee's service years with any employer shall count for the above 12-month period ("HRSSM Interpretation"). However, some local annual leave rules issued by the Guangdong Human Resources and Social Security Bureau ("Guangdong Interpretation") appeared to stipulate differently on this issue.
HRSSM Interpretation mainly includes the following two updates:
A. Continuous Working Period
The employee will be deemed as having worked for a continuous period of 12 months if he/she:
B. Cumulative Working Period
According to the HRSSM Interpretation, the cumulative working period includes:
The employee's cumulative working period can be proved by means of archival record, the employer's payment record of social insurance contributions, employment contract or other valid documents.
Guangdong InterpretationA. Continuous Working Period
In case any of the following two circumstances occurs, the employee's working period with an ex-employer shall be included for calculation of the 'continuous working period':
In addition, the Guangdong Interpretation prescribes that employees cannot take annual leave if their continuous working period is less than 12 months, even if their cumulative working period has been 12 months or more.
C. Leave Taking Arrangement
Under the Guangdong Interpretation, if the employer fails to arrange for the employee to use up all entitled days of annual leave by the end of the year when such leave is earned, the untaken annual leave can be carried over to the next year, as long as both the employer and employee so agree. However, an agreement that the employee takes no annual leave for two continuous years is generally not allowed.
D. Record Keeping Obligation
Under the Guangdong Interpretation,
E. Part-time Employees
Under the Guangdong Interpretation, part-time employees are not entitled to any annual leave entitlement.
For inquiries related to this Client Alert, please contact:
Andy Yeo ( )
Rachel Zhang ( )
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