China Employment Law Update

By Ying Wang, Pattie Walsh, Susan de Silva, Kristy Peacock Smith


Executive Summary
  1. Local minimum wage and local monthly average salaries have been updated in various cities across China.
  2. 28 provinces specify the standard amounts that can be received in respect of High Temperature Allowance, which will begin to be issued from this month.
  3. Employers' statutory required contributions for social insurance and housing provident fund are reduced again in China.

Updates to regional minimum monthly and hourly salary levels

Since the beginning of the year, minimum monthly and hourly salary standards have been implemented across various regions in China. The table below details the salary levels in each region, including the date on which they were, or will be, implemented:

Region New Minimum salary levels (RMB,monthly/hourly) Implementation date
Shanghai 2190/19 1 April 2016
Jiangsu 1770/15.5 1 January 2016
Chongqing 1500/15 1 January 2016
Shandong 1710/17.1 1 June 2016
Liaoning 1530/15 1 January 2016
Tianjin 1950 (monthly) 1 July 2016
Hainan 1430/12.6 1 May 2016

N.B: the figures above set out the highest minimum rate in the relevant province.

Three major cities, Shanghai, Beijing and Shenzhen, have announced a figure for the local average monthly salary over the last year. The average monthly salaries were RMB 5939, RMB 7086 and RMB 6753 respectively. These new figures will increase the cities' contribution of social security and the cap of statutory severance pay.
28 provinces specify the standard amount of high temperature allowance

In accordance with the Administrative Measures for Heatstroke Prevention and Cooling, as amended in 2012, employers must provide a high temperature allowance to all employees who complete outdoor work in temperatures exceeding 35℃, or to those employees whose workplace cannot be cooled to a temperature of 33℃ or below. 28 provinces have specified the standard allowances (shown in the table below), which will begin to be issued this month.

Region Amount (RMB) Time of distribution
Beijing 120yuan/month (Indoor+ high temperature)
180yuan/month (Outdoor+ high temperature)
June to August
Hebei 1.5yuan/hour (Outdoor)
1yuan/hour (Indoor+ high temperature)
21 May to 31 August
(In areas where the winter 'heating period' (where gas heating is provided by the government in each house) less than four months)
11 June to 20 August
(In areas where the winter 'heating period' is more than four months)
Zhejiang 225yuan/month (High temperature)
180yuan/month (Non-high temperature)
145yuan/month (General workers)
June to September
Shanxi 240yuan/month June to August
Jiangsu 200yuan/month June to September
Shanghai 200yuan/month June to September
Liaoning 200yuan/month July to September
Fujian 200yuan/month May to September
Inner Mongolia 180yuan/month To be confirmed
Guangdong 150yuan/month June to October
Guangxi 100-200yuan/month June to October
Hunan No less than 150yuan/month July to September
Jiangxi 240 yuan/month (Outdoor/high temperature)
160 yuan/month (Indoor+non-high temperature)
June to September
Shandong 200yuan/month (Outdoor/high temperature)
140yuan/month (Non-high temperature)
June to September
Gansu 12yuan/day (Outdoor/high temperature)
8yuan/day (Others)
June to September
Tianjin 12% of last year’s average wage per day in Tianjin June to September
Hubei 12yuan/day June to September
Henan 10yuan/day To be confirmed
Shaanxi 25yuan/day June to September
Hainan 10yuan/day April to October
Yunnan 10yuan/day To be confirmed
Jilin More than 10yuan/day To be confirmed
Sichuan 8-12yuan/day To be confirmed
Xinjiang 10-20yuan/day To be confirmed
Anhui No less than 10yuan/day To be confirmed
Ningxia 12yuan/day (Outdoor/ high temperature)
8yuan/day (Others)
June to September
Chongqing No less than 5/10/15 yuan/day (according to temperature) May to September
Guizhou 8yuan/day or 168yuan/month June to September
A Decrease in Social Insurance and Housing Fund Deposit

There is good news for employers as the statutory-required contributions for social insurance and housing provident fund are reduced.

According to the Circular of the Ministry of Human Resources and Social Security and the Ministry of Finance on Periodically Reducing Social Insurance Payment Rates (the "Circular"), employers' required contribution rates to the basic pension insurance of enterprises has been capped at 20% from 1 May 2016. The rate for companies that were already making a contribution of 20% has been reduced to 19%. In addition, the overall unemployment insurance payment rate has been further reduced by 1-1.5%, following a 1% reduction in 2015. Work-related injury insurance rates have been reduced by 0.25% and the maternity insurance payment rate has been reduced by 0.5% under paragraph 3 of the Circular. The reduction in rates aims to reduce business costs and promote business vitality.

The current supra-deposit ratio for housing fund will be capped at 12%, according to the executive meeting of the State Council, which took place on 13 April 2016. Provinces including Hebei, Jilin and Ningxia have already issued practical implementation details to benefit businesses. At the same time, the statutory release that companies in financial difficulty can apply for to suspend their required contribution offers them a 'buffer' period to adjust. They are entitled to raise the deposit rate or make up for missed contributions at a later stage when the company becomes profitable again.