BREAKING NEWS: China Issues New Employment Rules For Dealing with the Coronavirus

Yesterday, in BREAKING NEWS: Beijing Issues New Employment Rules For Dealing with the Coronavirus, I wrote about Beijing labor authorities having released a “notice on stabilizing labor relations during the period of epidemic prevention and control so as to better protect and benefit employees.” I concluded that post by saying that “if you are an employer outside Beijing, you should monitor notices from your local employment bureau, stay in good touch with your local employment bureau, and be very mindful of any employment decisions you make during this time.”

Since then, the PRC Ministry of Human Resources and Social Security issued its own nationwide “notice on the proper handling of labor relations during the period of epidemic prevention and control.” The below is a summary of this national notice, applicable for all of China.

If an employee is a patient with the virus, suspected patient or has come into close contact with a coronavirus patient or suspected patient, or is unable to work due to the government quarantine or other government-imposed emergency measures, the employer must provide the employee with remuneration during this period. The employer is also not permitted to unilaterally terminate an employee in accordance with Article 40 (unilateral termination of an employee not caused by employee wrongdoing) or 41 (mass layoff) of the PRC Employment Contract Law. In addition, if an employee’s contract expires during this period, it will be automatically extended until the end of the period of medical leave/medical observation/quarantine/emergency measures taken by the government. Though this term extension is automatic according to this notice, you still should document it in writing. Remember, as always, document everything.

If an employer experiences difficulty in production and operation due to the coronavirus outbreak, the employer may, after consultation with the employee and after obtaining employee consent, adjust employee salaries, rearrange employee shift rotations, reduce working hours, or implement other methods to stabilize its workforce. However, the employer should try not to initiate a layoff or reduce its workforce. If an employer suspends production within a wage payment cycle, the employer must pay employee wages in accordance with the standard provided in the employment contract. If it goes beyond a wage payment cycle, the employer must pay wages to an employee who provides normal labor at a rate of no less than the local minimum wage. If the employee does not provide normal labor, the employer must pay living expenses as required by the applicable law.

If a party is unable to apply for labor arbitration before the statute of limitations runs out due to the outbreak, the statute of limitations will be suspended and will continue to run again when the cause of suspension is eliminated. If the employment arbitral body is unable to hear a case due to the coronavirus outbreak, it may postpone the hearing accordingly.

Local labor bureaus are expected to strengthen guidance and services for affected employers and to increase labor security supervision and enforcement to protect employees’ rights and interests.

Interestingly, this notice also states that eligible employers will receive a subsidy for efforts to stabilize jobs, but it is vague on what this means.

If you are a China employer, note the key words from these notices: “enhanced employee protection and enforcement.” And be very careful with any employment decisions (especially any employee terminations) you make during this time. And, as always, monitor notices from your local employment bureau and stay in good touch with your local employment bureau.

We will be discussing the practical aspects of Chinese law and how it impacts business there. We will be telling you what works and what does not and what you as a businessperson can do to use the law to your advantage. Our aim is to assist businesses already in China or planning to go into China, not to break new ground in legal theory or policy.