Chinese Employment Law Issues in Dealing with Coronavirus Infections

In dealing with the outbreak and spread of the new coronavirus, the Chinese authorities, at both the national level and local level, have recently issued a series of notices in relation to employment law (e.g. the Notice issued by China’s Ministry of Human Resources and Social Security under this link. We have summarized some of the most important employment law issues below:

1. Holidays

Pursuant to the General Office’s Notice of the State Council dated 26 January 2020, (Link) the last day of the Lunar New Year Holidays shall be postponed from 30 January 2020 to 2 February 2020. Various local governments have also issued respective local rules concerning holiday extension or postponement of work resumption. For instance, in Shanghai, the general return to work date shall not be earlier than 24:00 on 9 February 2020 (Link).

In relation to the overtime work done by an employee under the standard working hours system during the adjusted and extended holidays (e.g. in Shanghai and please refer to this Link), other than the statutory holidays, the employer may arrange for such employee to take compensation leave at first. If no compensation leave is feasible, these employees should be paid at a rate of 200% of their regular wages during this period. For the overtime work done by an employee during the statutory holidays, such employee should be paid at a rate of 300% of his/her regular wages during this period and compensation leave will not generally be an option.

However, in many provinces and cities the postponement of work resumption is not deemed holiday extension but a work stoppage due to government measures (please refer to Item 2 below). In such cases no overtime pay or compensation leave but only normal salary is required for work done during the relevant period.

2. Remuneration

If an employee is a patient infected by the new coronavirus, or if it is suspected that he/she has become infected, or if he/she has come into close contact with such patient(s) or suspected patient(s), or if he/she is unable to work due to the relevant governmental measures, the employer must pay the employee his/her regular remuneration during the isolation treatment period, medical observation period or the period of no work caused by the governmental measures.

If operations are suspended during a payment cycle (e.g. 30 days) through no fault of the employee (e.g. by the governmental measures against the coronavirus infections), the employer has to pay regular wages according to the employment contract. Should the work stoppage last longer than one payment cycle and if the employee has been providing normal work, the local minimum wage standard must be complied with. In cases where no normal work has been provided during the prolonged work stoppage, the employer shall pay the local living fees to the employee.

3. Termination

Except in cases of termination for cause and mutual termination, an employer may not unilaterally terminate the employment contract with their employee during his/her isolation treatment period, medical observation period or the period of no work caused by the governmental measures.

In addition, if an employee’s contract expires during the above-mentioned periods, it shall be automatically extended until the end of such periods.

Companies should try to avoid mass layoff due to virus-related difficulties. After consultation and agreement with their employees, the employers may reduce wages and working hours as well as adjust work positions and leave arrangements. They may also apply for governmental subsidies under certain conditions.

4. Non-Discrimination

Unless the applicable legal provisions for controlling spread of disease provide for otherwise, an employee should not be discriminated against in the course of employment on the basis of facts that he/she is/was a patient infected by the new coronavirus, or it is suspected that he/she has become infected, or he/she has come into close contact with such patient(s) or suspected patient(s), or he/she is from the region affected by the new coronavirus.

5. Work-Related Injury

Employers shall currently try to avoid assigning their employees to work in the regions affected by the new coronavirus in order to avoid work-related injury.

6. Compliance

Employers shall strictly comply with all statutory requirements under the Work Safety Law and the Communicable Diseases Law as well as other national and local rules. They should carefully follow the legal updates, fully cooperate with healthy and security authorities, consciously take prevention measures, and immediately report infectious cases and suspected cases.    

7. Statute of Limitations

Should an employer or an employee be unable to apply for labour arbitration in time, as a result of the outbreak and spread of the coronavirus, the relevant statute of limitations shall be suspended and will only continue to run again when the cause of suspension is eliminated.