Minimum Wage
Minimum wage is defined as the minimum labour remuneration paid by the employer required by law on the condition that the labourers have provided normal labour during the legal working hours or working hours agreed by the labour contract.
In accordance with the Labour Law, the state has to implement a system of guaranteed minimum wage. Minimum wage can be fixed by provincial, regional or municipal governments and is reported to the State Council for record. Labour Law requires that wages paid to the labourers by employing units should not be less than the local standards on minimum wages.
Minimum wages in China are determined region wise (for 31 provinces) and the highest monthly minimum wage is in the Shanghai (2,690 yuan/month) while the lowest minimum wage are in Jilin and Qinghai provinces (1,880 yuan/month). Minimum wages in different regions are determined and adjusted with reference to the following factors: (i) living expense; (ii) the average wage level in the society; (iii) labour productivity; (iv) employment situation; and (v) different levels of economic development between regions.
“The "Minimum Wage Regulations" were introduced by the Ministry of Labour and Social Security of the People's Republic of China on January 20, 2004. These regulations serve as the fundamental guidelines for establishing minimum wage standards. In compliance with the "Labour Law" and the "Minimum Wage Regulations," 31 provinces, autonomous regions, and municipalities directly under the Central Government have developed their own minimum wage regulations and local wage standards.
In some regions, industries have also signed collective contracts through consultation and established industry minimum wage standards. Here are examples:
- In 2022, a unique collective wage agreement was introduced in the industrial machinery industry in Dalian, Liaoning Province. This agreement set minimum wage criteria and raised the rates for 16 technical job categories within the industry.
- In 2023, during the collective contract negotiation for the construction industry in Wuhan, Hubei Province, specific daily minimum wage standards were established for various types of work.
- In 2024, the agreement reached by the courier services industry in Liupanshui City, Guizhou Province, specified that the minimum monthly wage for workers in this sector would be set at 2,800 yuan.
- In 2024, a collective contract was signed for the housekeeping industry in Fancheng District, Xiangyang City, Hubei Province. The contract clarified the minimum wage standards and hourly minimum wage standards for the five major positions in the industry.
The minimum wage standard is set and updated in line with the "Minimum Wage Regulations" by the labour and social security administrative department of the provincial, autonomous regional, and directly governed municipality's people's government, in coordination with trade unions, enterprise federations, and entrepreneur associations at the same level. The proposed plan is then submitted to the Labour Security Department.
According to the law, once the minimum wage standards are set and implemented, they need to be promptly adjusted if any factors used to determine them change. The minimum wage standards must be reviewed and modified at least once every two years to ensure they accurately reflect the prevailing conditions.
According to the Labour Contract Law, the labour administrative departments of local governments at or above the county level must supervise and inspect employers' compliance with minimum wage standards.
Enforcement of all labour legislation, including minimum wage provisions, is entrusted to the labour departments of the local governments. Individual workers also have the right to file a complaint with a labour inspectorate or seek arbitration or litigation. A trade union may also supervise the implementation of a law and report violations to the labour inspectorate. The Labour Contract Law provides that if an employing unit fails to comply with the provisions of a labour contract or provisions by the State and fails to timely pay a full amount of labour remuneration to a labourer; or pays lower than the local minimum wage, the competent labour department should order the employing unit to pay the outstanding amount. If these payments are delayed, a compensation equivalent to 50%-100% of these payments must be paid in addition to the due payments.
The "Minimum Wage Regulations" state that regular wages should not include overtime pay or additional pay for working during mid-shifts, night shifts, in high or low temperatures, underground, or in toxic and hazardous conditions. Additionally, the allowances, benefits, and welfare provided under laws and regulations should not be less than the minimum wage set by the local authorities.
The Regulation of Minimum Wages also provides that where a violation is established, the employer is ordered to pay the difference within a specified period and damages of up to 5 times the outstanding amount.
Sources: §48-49 of the Labour Law 1994; § 3, 6,8,10, 12 and 13 of the Regulations on Minimum Wages 2004; §74,85 of the Labour Contract Law 2007
For updated minimum wage rates, please refer to the section on minimum wage.
Regular Pay
The "Interim Provisions on Wage Payment" specify that wages are the remuneration provided to workers by their employer in various forms as stipulated in the labour contract. It is required that wages must be paid in cash and cannot be substituted with goods or securities. The agreed-upon payment date between the employer and employee must be honoured. On holidays or rest days, wages should be paid beforehand on the next working day. Wages are typically paid on a monthly basis, but in cases where a weekly, daily, or hourly wage system is in place, payments can be made accordingly.
Employers are required to pay workers who complete one-time temporary labour or a specific job as agreed upon in their contracts. Part-time employees should receive their wages within fifteen days of completing their tasks.
When the employer and the employee mutually agree to end their working relationship, or when the employment contract is terminated in accordance with the law, the employer is responsible for fully compensating the employee for their wages.
Employers are only permitted to deduct wages from workers for personal income tax, social insurance fees, court-ordered alimony, and other deductions permitted by laws and regulations.
If an employee is responsible for financial losses to the employer due to their own actions, the employer can request the employee to compensate for the losses as outlined in their employment contract. The compensation may be deducted from the employee's salary, but the monthly deduction cannot exceed 20% of the employee's monthly salary. If after the deduction, the remaining salary is less than the local monthly minimum wage, the employee will be paid the minimum wage.
Sources: §50 of the Labour Law 1994; §30 & 72 of the Labour Contract Law 2007; §5 of the Regulations on Minimum Wages 2004; §3,5,7-9,15-16 of Interim Regulations on Wage Payment
