In accordance with the provisions of the Labor Law of the People's Republic of China, the distribution of wages must follow the principle of distribution according to work and equal pay for equal work.
Foreign-invested enterprises must be in line with the national and local minimum salary standards. The increase in the average salary of the employees is based on the development of the enterprise. Based on the company's annual return, labor productivity, as well as the local urban consumer price index and wage guidelines, the payroll is determined by the board of directors or through collective negotiation of the enterprise.
Under any of the following circumstances, the employing unit must, according to the following standards, pay laborers remunerations that are higher than those for normal working hours:
(1) To pay no less than 150 percent of the normal wages if an extension of working hours is arranged;
(2) To pay no less than 200 percent of the normal wages if work is arranged on off days and no make-up off days can be arranged; or
(3) To pay no less than 300 percent of the normal wages if work is arranged on statutory holidays.
Insurance and Welfare
Foreign-invested enterprises are supposed to participate in the social insurance systems of pension, unemployment, medical care, work injury and childbirth through regular and adequate payment to the insurance agencies in accordance with the standards prescribed by the local government as required by relevant regulations. Insurance premiums should be expensed in accordance with state regulations. Employees should also pay the required amount for their pension, medical care and unemployment insurances in accordance with relevant regulations. In addition to the insurances above, there are other welfares like housing fund, professional training, stipends and statutory holidays.
When an employee has served one full year but less than 10 years accumulatively, he or she is entitled to five days of annual leave. If they have served for 10 full years but less than 20 years, their annual leave is 10 days. If they have served for 20 full years, their annual leave is 15 days.
The maternity leave of female employees shall be 98 days, including 15 days of antenatal leave. An extra maternity leave of 15 days will be granted in case of dystocia. Female employees who bear more than one baby in a single birth will be granted an extra maternity leave of 15 days for each additional baby borne.
Working Hour System
Foreign-invested enterprises implement China's current working hour system — no more than 8 hours per day and on average no more than 40 hours per week. Upon approval by the labor department, if the enterprises cannot operate on the standard working hours due to the characteristics of their production, the enterprises can operate on a non-standard working hour system, e.g. irregular working hours and comprehensive working hours scheme.
The employing unit may extend working hours as necessitated by its production or business operation after consultation with the trade union and laborers, but the extended working hour per day will generally not exceed one hour; if such extension is needed for special reasons, under the condition that the health of laborers is guaranteed, the extended hours will not exceed three hours per day. However, the total extension in a month will not exceed thirty six hours.
For more details of the Labor Law of the People's Republic of China, please click here.