China Releases Twelve Opinions on How Companies Resuming Normal Operations Should Treat Their Employees

On February 7, the PRC Ministry of Human Resources and Social Security released Twelve Opinions on Stabilizing Labor Relations and Supporting Enterprises’ Resumption of Work and Production. Here is a short summary of the issues most relevant to foreign companies with employees in China and to expats in China.

First, employers and employees are encouraged to resolve through consultations any employment issues that arise before resuming work. Employers are expected to initiate the conversations with employees regarding issues that need to be resolved. If possible, employers should arrange to have their employees work from home, and if working remotely is not possible, employers may consult with the employees about having them take vacation days or employer-provided leave.

Second, employers are encouraged to arrange employee working hours in a flexible manner. To avoid crowd gathering as much as possible, employers are encouraged to consult with employees to adopt flexible methods, such as shift rotations and flexible commute times. Note that this is not to be too confused with designating employees  who work under the flexible working hours system, which generally requires prior government approval.  Note that if you as an employer have not already secured government approval to have one or more of your employees work flexible hours, you cannot do so now. Employers that need their employees to complete urgent tasks related to epidemic prevention and control may, after consultation with the employees and the worker’s union, have employees work overtime without having to comply with the normal restrictions on extending working hours, provided they give due protection to their employees’ health and safety.

Next, the Opinions emphasize that during this time, employers cannot unilaterally terminate an employee who is quarantined or is subject to government-imposed emergency measures, even though the employee is not able to provide normal labor. Note that this prohibition applies to dispatched workers as well.

Employers that are permitted to resume work should provide necessary anti-epidemic measures for the protection of their employees. If an employee is unwilling to return to work without a valid reason, the employer should first talk to the employee about returning to work and if the employee still refuses to come back to work without justification, the employer can discipline the employee. Note that to ensure the enforceability of the employer’s disciplinary action, the employer should make sure there is a written basis for its action, preferably in its employer rules and regulations or in the relevant employee’s employment contract. So long as the coronavirus crisis continues, I strongly urge employers use even more caution than normal in disciplining or terminating employees.

Employers are encouraged to negotiate with employees regarding their wage payments during business closure. The general guideline is as follows: if the employee is not able to provide normal labor, the employer should consult with the employee and should pay employee wages pursuant to the standard specified in the employment contract within a wage payment cycle, and if it exceeds a wage payment cycle, the employer should provide living expenses as required under the law. The employer should also refer to the national law regarding wage payments during suspension of production and operation for guidance. You also need to check and follow all applicable local laws on this issue as well.

Employers experiencing difficulties in production and operation as a result of the coronavirus outbreak are encouraged to negotiate with their employee regarding salary adjustments, shift rotations, reduction of working hours or other ways to stabilize their workforces. Employers unable to pay salaries should discuss deferred salary payments with the worker’s union or worker representatives.

Employees unable to provide normal labor due to the quarantines must still be provided their normal wages as though they provided their full normal labor. After an employee gets out of a quarantine, the employee who needs treatment must be paid in accordance with the standard required during the medical leave period.

If an employee was required to work on epidemic prevention and control during the extended holiday, the employer shall arrange comp time and if comp time cannot be arranged, the employer shall pay overtime.

The government will take various measures to reduce the burden on employers, including helping employers reduce recruitment costs, reasonably sharing the cost of job stabilization (e.g., through refunds, subsidies), and providing free online trainings.

As always, keep in mind your local employment laws (including newly issued local employment laws specific to the coronavirus) will also apply to pretty much everything employment related so it is important that you keep connected regarding local government updates and comply with those as well.

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.