Are employers required to pay salaries during lockdowns?
Can employers cut salaries during the lockdown?
Can employers lay off employees because of lockdown?
How can employers manage employees who work from home?
Can employers implement certain requirements to enter the workplace?
This articles answers five key questions regarding employment management under China's dynamic zero-covid-19 policy (for further details please see "Lockdown and reopening in Shanghai – guidance for employers").
Are employers required to pay salaries during lockdowns?
Yes, payment of salaries falls into two categories depending on the employee's reason for not attending work:
- confirmed, suspected or close contact cases – their salary must be paid as normal; and
- lockdowns that prevent their presence in the workplace – the employer can arrange for employees to:
- work from home (if needed and practical) and pay their normal salary; or
- take annual leave and other leave days if working from home is not required or possible. Salaries can be lowered to the local minimum standard (specified below) after all the leave has been used.
Can employers cut salaries during the lockdown?
Yes, there are several options to cut employment costs during lockdowns:
- taking leave – if employees are unable or unwilling to work from home during a lockdown, the employer can arrange for (some of) these employees to use their remaining annual leave and compensatory time off (ie, leave earned by working overtime). This arrangement may require the employee's consent, but even if employees disagree, the general expectation is that the authorities will side with the company to arrange enforced leave as long as the circumstances are reasonable;
- collective bargaining on salary deduction – employers are also allowed to enter negotiations with the company's trade union, all employees or employee representatives regarding salary reductions. The government has encouraged this approach in order for employers and employees "to overcome these hard times". Employees may be willing to compromise if the company's business conditions are critical; and
- forced salary reduction based on business closure or suspension – from a legal perspective, where an enterprise suspends business or operation during a wage payment cycle, it must pay wages to its workers as normal. Where the suspension exceeds a wage payment cycle, the enterprise may cut the salary to local minimum standard.
Can employers lay off employees because of lockdown?
Terminating employment without cause is not an option in China and can only occur on specified and limited legal grounds. No special rules apply or allow a company to directly terminate some or all its employees during or because of the lockdown. There may also be additional scrutiny from the labour authorities and courts as to whether the legal grounds for termination were genuine and legitimate.
How can employers manage employees who work from home?
Many companies now have certain remote working rules and policies. There might not be a perfect solution to managing employee work performance when working from home; however, it could be helpful to implement a management system that establishes "core working hours" (eg, 10 o'clock in the morning to four o'clock in the afternoon) during which employees must be responsive to all work requests.
Can employers implement certain requirements to access the workplace?
Yes, according to the government's pandemic prevention and control requirements, employers are obliged to ensure the wellbeing of their employees, including requiring them to be vaccinated and present negative covid-19 test results, health codes and travel history cards before coming into office.
There have not been any national or local policies that have made vaccination compulsory in China (except for maybe certain industries and lines of work facing a high risk of infection). The government has taken many measures to encourage and promote vaccination but has also clarified that vaccinations must be conducted on a voluntary basis and should not be forced upon any individual. If an employee refuses or cannot be vaccinated, they may work from home.
For further information on this topic please contact Yuhao Chang at JunHe by email ([email protected]). The JunHe website can be accessed at www.junhe.com.