Minimum Monthly Wage Raised

New Legislation Enacted

Starting from April 1, 2017, the minimum wage in Shanghai has been raised from ¥2190 to ¥2300 per month. The new average salary went from ¥6,378 to ¥6,504 per month, which also increased employer’s severance and social insurance contributions.

Labor Arbitration Procedures Simplified and Clarified

New Legislation Enacted

Pursuant to amendments to the existing Labor Arbitration Procedural Regulations released by the Ministry of Human Resources and Social Security (MOHRSS), scope of claims that are subject to final determination in arbitration will expand to economic compensation, penalty and severance pay for those based on illegal non-compete clause, illegal termination of an employment contract, and failure to enter an employment contract in writing. These amendments are effective as of July 1, 2017.

Beijing Highest Court and the Arbitration Tribunal Issue Employment Disputes Guidelines

New Regulation or Official Guidance

On April 26, 2017, the Beijing Highest Court and the Beijing Labor Arbitration Committee jointly issued interpretations and implementing guidelines of rules and regulations concerning labor and employment matters. If the locale of employment is not specified or is unclear in the employment contract, or if it is not self-evident by the nature of an employer’s business, it shall be assumed to be where an employee performs his duties. An employer may not change an employee’s work location without justifiable reasons or adequate compensation. The guidelines also provide that employees should not be granted reinstatement as a remedy for wrongful termination claims in any of the following situations: (1) the employee is employed by another employer; (2) the employee refused a reinstatement offer made by the employer during arbitration or litigation; (3) the employee’s employment contract has expired and the employee does not have the right to demand an open-term contract; and (4) the original position of the employee is unique (e.g., a general manager) and has been filled by another employee.