WHAT IS THE WAGE SYSTEM IN CHINA?

“Wages” refer to the remuneration for labour which the enterprise pays directly to the employee in the form of currency, in accordance with the State regulations and as required by the employment contract. This generally includes wages calculated on a time basis or on a piece-rate basis and rewards and certain allowances.

For employees, wages are the most fundamental source of income and serve as the form of compensation for work performed by them. Furthermore, the receipt of wages is an important right and represents the primary benefit for employees.

For employers, wages are an important component of production costs and, as such, a reasonable wage allocation system can directly affect the stability of the employment relationship and, in turn, the profitability of the enterprise.

This solution sheds light on:

§ the ways in which an enterprise should pay wages to its employees, including minimum wages, frequency of payment, statement of wages, etc;

§ how overtime pay is calculated;

§ how the wages of senior management personnel of a Chinese party of a Sino-foreign joint venture are determined;

§ the types of remuneration that are excluded form the local minimum wage;

§ the legal liability for paying wages lower than the local minimum wage;

§ circumstances under which the withholding of employees’ wages by an enterprise is legal; and

§ the legal liability for unlawful deduction or delayed payment of wages to its employees.