The PRC State Counsel extended the Lunar New Year holiday by three days to 2 February 2020. Local governments have similarly ordered businesses to only resume their operations in early February.

Extended Lunar New Year Holiday in the PRC

In an effort to contain the spread of the novel and deadly coronavirus in the PRC, the State Counsel announced on 27 January 2020 that the Lunar New Year holiday would be extended by three days to 2 February 2020. The holiday started on 24 January 2020 and was originally due to end on 30 January 2020. Work day will now resume on 3 February 2020.

Approaches taken by the local governments

The Shanghai local government ordered all businesses to remain closed until 9 February 2020, except for certain essential businesses as follows, which will resume operation on 3 February 2020:

  • businesses relating to the city's critical infrastructure, such as water supply, gas supply, power supply, telecommunication and other similar businesses;
  • businesses relating to epidemic prevention and control, such as those providing medical equipment, medicine, protective product production and sales, and other similar businesses;
  • businesses which provide daily necessities, such as supermarket, food production and supply, and other similar businesses; and
  • other businesses which affect the national economy and people's livelihood such as the Shanghai stock exchange.

The Shanghai labour authority clarified that the extended holiday period from 3 to 9 February 2020 shall be treated as "weekends". Any employees of non-essential businesses who provide services in this period are entitled to overtime compensation at the rate of 200% of their salary or time off in lieu. This additional compensation does not apply to employees who are on flexible work schemes in Shanghai.

Other provinces may follow suit.

Key takeaways

In view of the novel coronavirus outbreak, swift changes and policies affecting business operating in the PRC are to be expected over the next few weeks or months. Businesses should regularly monitor updates and notifications from the local authorities, and maintain an active line of communication with their employees in the event of any emergency.