Shenzhen, Beijing Raise Minimum Wage Standards

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Jan. 12 – On December 31, 2011, both Shenzhen and Beijing announced their new minimum wage standards for 2012. Following the adjustment, Shenzhen’s minimum wage standard will reach RMB1,500, the highest in the whole country.

Shenzhen
According to the “Circular on Minimum Wage Standards Adjustment in Shenzhen (shenrenshegui [2011] No.19),” starting on February 1, 2012, Shenzhen’s minimum wage standards will be raised as follows:

Compared to last year, when the raised minimum wage standards were not implemented until April 1, 2011, this year’s new standards will take effect two months earlier, immediately after the Chinese New Year. This sends a message to employers in the city so that they can plan their annual budget in advance. Those who underpay their employees may face inspection by local labor supervision departments.

Beijing
In accordance with the “Circular on 2012 Minimum Wage Standards Adjustment in Beijing (jingrenshelaofa [2011] No.375),” starting on January 1, 2012, Beijing’s minimum wage standards have already been lifted as follows:

For full-time workers, the components of the aforementioned minimum wage shall not include:

  • Compensation for lunch break shifts, night shifts and working under special conditions
  • Compensation for working overtime
  • Social insurance premiums and housing fund contributions
  • Other income that shall not be counted as part of the minimum wage according to national and local regulations

For part-time workers, the components of the aforementioned minimum wage may include premium payments for pension, medical insurance and unemployment insurance.

For employers paying for piecework, the piece rates shall be determined through equal negotiations. An employee that works regularly within official working hours shall receive a wage of no less than the minimum wage standards.

Dezan Shira & Associates is a boutique professional services firm providing foreign direct investment business advisory, tax, accounting, payroll and due diligence services for multinational clients in China, Hong Kong, India, Singapore and Vietnam. For further information or professional advice, please email china@dezshira.com.

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3 responses to “Shenzhen, Beijing Raise Minimum Wage Standards”

  1. Joel says:

    “For employers paying for piecework, the piece rates shall be determined through equal negotiations”. Obviously a huge loop hole. e.g. garment or toys factories having employees work 12 or 14 hours a day, 7 days a week and pay “per piece”. How is it compared to other countries?

    I do not understand the category under Beijing’s “per hour”. How can a full time employee get paid “per hour”? Is that in a situation where the required working time is less than 40 hours a week? For example, an employee who works only 30 hours a week then the calculation would be 30 x 7.2?

  2. @Joel – Point 1, I think you need to specifically engage in market research for that, and you’ll need a budget. Point 2, China establishes the length of permissible working days on an hourly basis (generally 8 hours) with scales for overtime, permitted breaks and so on based that, with additional variations for some specific industries. Without knowing more about the industry you are in, where you are in China or the specific issues you face, it is difficult to answer your question. But you can email us at tax@dezshira.com if you wish and we’ll take a look at it. – Chris

  3. […] in 2010 and 2011 (somewhat less this year, in response to slowing demand: 8.6 % in Beijing, 13% in Shenzhen and Shanghai).  Meanwhile another cost of business, land prices, rose even more rapidly. […]

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