China Update Payroll Management During Covid – December 2022
The explosion of COVID cases has greatly impacted Beijing, with office buildings and streets empty and daily life significantly disrupted. Just two weeks after leaders eased the restrictive COVID prevention policy, Beijing saw a significant outbreak with approximately 65% of the population infected and an estimated 80%-90% expected to become infected by the end of December. Meanwhile, others stay home to avoid being infected, and most residents are working at home if they are still well enough to do so. So how do employers guide payroll management during this difficult time? Here are some overall points for the different situations:
- When companies are working normally, although the employees are in close contact with infected cases or are infected already, they can still work as normally:
The companies shall pay wages in accordance with the normal working condition, that is, pay the salary in full. And enterprises cannot ask employees to must take time off if employees can still work at home.
- When Employees are unable to work during the quarantine/treatment period:
If employees are entitled to paid leaves: After consultation between the companies with employees, employees can offset paid leave in advance, and the companies need to pay wages according to the original vacation day policies. If the number of days of isolation/treatment is higher than the number of paid vacation days of the employee, wages shall be paid according to the following unpaid leave situation.
If employees are not receiving paid leave: the Companies shall pay the fixed components such as basic salary and post salary in the employee’s paychecks and treatment during normal work and may not pay non-fixed components of labor remuneration such as performance bonuses, incentive bonuses, commissions, and car subsidies and meal subsidies related benefits, but the total salary amount shall not be lower than the local minimum wage standard.
If the employee’s monthly salary has not been agreed on a fixed part, the enterprise may revise the fixed salary amount through consultation with the employee or through procedures such as the employee representative meeting.
- Employees who test negative for COVID but are still on sick leave:
The companies can pay according to local sick pay standards. For Beijing as an example, according to Article 11 of the guidelines of the Beijing Municipal Higher People’s Court and the Beijing Municipal Labor and Personnel Dispute Arbitration Commission on the Application of Law in the Trial of Labor Dispute Cases During the Prevention and Control of the Coronavirus Pneumonia Epidemic and Article 21 of the Beijing Wage Payment Regulations, sick pay is paid according to the provisions of the medical treatment period, and the standard of sick leave pay in Beijing is not less than 80% of the minimum wage.
Note: Enterprises need to refine the leave situation, process, and sick pay ratio from the management system.
- When companies are in a state of shutdown or inactivation status:
In the first wage payment cycle (up to 30 days), companies shall pay employees normally by the standards agreed in their employment contracts.
If exceeding one month, the salary may be paid according to the newly agreed standard of the two parties according to the services provided by the employees, but it shall not be lower than the local minimum wage standard; If the employee does not provide services, the employer can only pay their living expenses to retain their job. With Beijing as an example, employees should be paid basic living expenses at a rate of not less than 70% of the minimum wage standard of the place where the labor contract is performed. Living expenses are paid until the enterprise resumes work and production or terminates the labor relationship with the employee.