Other BriefingsUnderstanding How Employers Can Implement the Special Work Hour Systems in China
By taking the time to understand the special work hour systems available in China and complying with local labor regulations, employers can successfully adopt flexible work arrangements or comprehensive work hour systems that benefit both the company and its employees. Kelly Xu at Dezan Shira & Associates’ Shanghai office discusses how the different work hour systems are implemented in China, including eligibility criteria for employers, approvals required, and employee rights in these situations.
Work hour systems define specific work hours, rest periods, and overtime payments rates for employees. In China, there are three main work hour systems: the standard work hour system, the comprehensive work hour system, and the flexible (non-fixed) work hour system. The latter two systems are considered ‘special work hour systems’, which have special approval and compliance requirements.
In China, most employees work standard work hours; that is, eight hours a day, five days a week. However, with the diversification of work structures and employment types, it is becoming increasingly common for certain employees to work irregular hours over varying periods throughout the year, which are against the rules under the standard work hour and may cause high overtime costs for the extra hours worked by the employee. In these cases, adopting a flexible work arrangement or a comprehensive work hours system can help employers stay compliant with China’s labor laws, manage high overtime costs, and retain top talent.
To implement flexible work arrangements or comprehensive work hour systems in China, employers must ensure compliance with local labor regulations and meet certain requirements. It is essential for companies to familiarize themselves with the different work hour systems available and identify which system best suits their China business needs.
What are China’s flexible and comprehensive work hour systems?
China’s flexible work hour systems refer to arrangements under which an employee works a fixed number of hours per day and per week, but these hours can be completed at irregular times, rather than during a fixed working window. For example, if an employee works late on one day, then the company can arrange for the employee to come into work later or get off earlier than usual the following day to make up for the additional hours worked.
Generally, no overtime cost is associated with the non-fixed work hour system except for hours worked on public holidays. However, there are differences in overtime regulations across different regions. For instance, in Beijing, non-fixed work hour employees are not entitled to overtime pay for hours worked on public holidays. However, in Shanghai, these hours are considered as overtime, and employers are required to pay compensation of up to 300 percent of the normal wage.
On the other hand, under China’s comprehensive work hours system, an employer calculates an employee’s work hours comprehensively on a weekly, monthly, quarterly, or yearly basis. Under this system, the average daily work hours and average weekly work hours are basically the same as the standard work hours, but an employee may work more hours on one day and fewer on another day, usually by design.
Under the comprehensive work our system, overtime is applicable for hours worked above the standard set per cycle. Such rates match those of the standard work hour system for extra hours worked and work performed on public holidays. However, no rest day is outlined under this system.
Who is qualified to apply for the flexible or comprehensive work hour system?
Usually, employees who are not able to work standard work hours, such as those that need to work night shifts or during weekends, can adopt the flexible work hour system. Employees on such a work hour system will generally be paid as a salaried employee, and this salary is a set amount paid per period, often monthly in China.
These types of employees are typically senior managerial personnel, field staff, salespersons, some on-duty personnel, employees engaged in long-distance transport, taxi drivers, some stevedores in railways, ports, or warehouses, and employees engaged in mobile work due to the special nature of their jobs in the company.
An example of an employee that would adopt flexible hours is a salesperson, who, due to the nature of the position, often needs to go on business trips to visit clients and meet vendors out of normal office hours, such as during evenings or on weekends. In this case, the employer could allow the employee to go to work later than regular work time, allowing the employee to rest in the morning and go to work in the afternoon to balance the total work time.
Meanwhile, the comprehensive work hour system is typically adopted for employees who are required for continuous operations due to the special nature of their jobs, such as work related to transportation, aviation, railway, shipping, fishing, postal and telecommunications service industries, electric power, petroleum, petrochemical, and finance industries. It also includes seasonal workers and those subject to natural constraints, such as people working in the mining, construction, salt production, sugar production, and tourism industries.
For these types of employees, companies can calculate the work hours comprehensively on a weekly, monthly, quarterly, or yearly basis. The length of the employees’ average daily and average weekly work hours should come to almost the same as the standard working hours. For instance, a shift worker at a store that works two days and has one day off, but works 12 hour shifts, will have worked a total of 24 hours over three days, the same as an employee on a standard schedule working the eight hours every day for three days.
What is the approval process to implement the special work hours system and is it time-bound to a validity period?
To implement a flexible or comprehensive work hour system in China, employers must follow a specific process that includes submitting their plan to the local labor bureau and obtaining approval.
To prepare the plan, employers must collect relevant information and prepare necessary documents. This includes obtaining employees’ signatures indicating their agreement to the work hour arrangements, which must be included in the application submitted to the local labor bureau.
Typically, the validity period for a flexible or comprehensive work hour system is one calendar year, after which the employer must reapply for approval one month prior to the expiration date.
It is important for employers to stay informed about the application and renewal process to adopt these special work hour systems and ensure that their plan complies with all relevant labor regulations to avoid any issues during the renewal process.
How can employers get approval for the special work hour systems for multiple employees and positions?
Flexible or comprehensive work hour systems in China are applied to specific positions within a company, not to specific employees. This means that if a new employee joins the company and works in a position that has already been approved for flexible or comprehensive work hours, they are automatically approved to work under the same arrangement.
However, if an employee joins the company in a new position that has not yet been approved for flexible or comprehensive work hours, the employer must wait until the next calendar year to apply for approval. In such cases, if a new employee joins the company for a different position during the validity period of an approved flexible or comprehensive work hour system for another position, it may be more practical for the employer and the employee to negotiate specific salary and overtime pay arrangements internally in the interim. The employer can then add the new position to the list of positions in the next round of applications for flexible or comprehensive work hours.
What are employee’s rights to rest and overtime payment under China’s special work hour systems?
It is important to note that flexible work hour arrangements often do not specify exact work hours, and it is the responsibility of employers to take appropriate measures to ensure that employees have adequate rest and holiday time.
This may involve implementing policies such as centralized work and rest (continuous work for a specified period followed by a period of rest), staggered leave, time off in lieu, or other flexible work and holiday arrangements. Flexible work hour arrangements can also be balanced between workdays and weekends.
Under the comprehensive work hour system, if employees work beyond the regulated hours, employers are required to pay overtime wages. Additionally, employees who work as per the comprehensive work hour system must be compensated for working on public holidays. However, employees who work flexible work hour system are generally not entitled to overtime pay for hours worked on public holidays, despite local variances.
About Us
China Briefing is written and produced by Dezan Shira & Associates. The practice assists foreign investors into China and has done so since 1992 through offices in Beijing, Tianjin, Dalian, Qingdao, Shanghai, Hangzhou, Ningbo, Suzhou, Guangzhou, Dongguan, Zhongshan, Shenzhen, and Hong Kong. Please contact the firm for assistance in China at china@dezshira.com.
Dezan Shira & Associates has offices in Vietnam, Indonesia, Singapore, United States, Germany, Italy, India, and Russia, in addition to our trade research facilities along the Belt & Road Initiative. We also have partner firms assisting foreign investors in The Philippines, Malaysia, Thailand, Bangladesh.
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