Zhejiang New Minimum Wage Standards to be Set in line with GDP Per Capita

March 4, 2011 Posted by China Briefing Reading Time: < 1 minute

Mar. 4 – The Zhejiang Provincial Government has announced that minimum wages in the province are to increase in line with the GDP per capita in each city during the 12th Five-Year Plan. Local authorities should take into account the degree of financial development, cost of living, and the average salary rise in each area in order to come up with an appropriate standard for the minimum wage, said a news report released by provincial authorities this week.

Over the last 17 years, the Zhejiang Province has already seen 11 minimum wage increases, from RMB200 per month in 1994 to the current minimum wage of RMB1,100 per month – an overall increase of 450 percent. At one point in 2010, Zhejiang was actually the territory with the highest minimum wages in China. This title was short-lived, however, after being overtaken by Shanghai a month later. The Zhejiang government believes that raising minimum wages fairly is an important factor in promoting a healthy average salary rise, especially for the low-income employees in the community.

Interestingly, Shanghai officials have just announced that the minimum wage in Shanghai will change effective from April 1, to RMB1,280 per month – still the highest in the country. Zhejiang Province is expected to adjust their minimum wages again this year, and has urged local authorities to tighten up on supervision practices to ensure that companies are not dodging minimum wage requirements by using piecework salary or overtime systems.

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