On March 2, 2017, the Zhejiang provincial government issued the Zhejiang Provincial Administrative Measures on Wage Payment by Enterprises, effective as of May 1, 2017. These new rules supersede the previous version of the wage payment rules with the same name issued in 2002 and amended in 2010. The new rules establish payroll and attendance record requirements and revise earlier wage payment rules.
Payroll and attendance records
Under the new rules, the employer must compile and maintain in writing:
(i) payroll records and employee payslips; and
(ii) employee attendance records with monthly employee confirmations of those records.
The payroll records and attendance records should be kept for at least two years. If the employer forges, hides or destroys any payroll or attendance records, the employer can be fined CNY 5,000 to CNY 20,000, and the legal representative or person directly in charge of payroll matters can be fined CNY 1,000 to CNY 10,000.
Amended wage payment rules
Although the key rules on wage payments remain the same as under the old rules, the new rules now require:
- employees who no longer provide normal services to an employer during a business suspension or closure should be paid at least 80% of the local minimum wage
- employee wage payments can now be postponed up to 30 days (from 15 days previously) through collective bargaining or individual employee agreements if the employer encounters difficulty in business operations
- payment of outstanding wages at termination must occur in full within five days of the employer "processing the termination procedures" rather than from the actual termination date
- fines for wage underpayment have been increased to:
- CNY 10,000 to CNY 30,000 in ordinary circumstances
- CNY 50,000 to CNY 100,000 in extraordinary circumstances where the failure to pay the wages has impaired public security.
Key take-away points:
Employers in Zhejiang Province should update or establish payroll and attendance record policies and systems to fully comply with the new rules, including with the two-year record maintenance requirement. They should also amend their employment contracts, policies and practices to reflect the wage payment requirements during a business suspension in case those are in conflict with the new rules.