Ten Provinces Release Guidelines on Wage Increases for 2014

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SHANGHAI – To date, 10 provinces have released official “guidelines on wage increases” for 2014, including Beijing, Tianjin, Hubei, Shandong, Shanxi, Shaanxi, Henan, Xinjiang, Sichuan and Liaoning. In China, these guidelines are released by municipal governments and lay out the suggested wage increase levels for enterprises based on regional GDP, labor markets, and other socioeconomic conditions. Guidelines on wage increases can be divided into three levels:

  • Average suggested wage increase: Suggested for enterprises experiencing normal business operations and normal economic growth.
  • Maximum suggested wage increase: Suggested for enterprises experiencing good business operations and strong economic growth.
  • Minimum suggested wage increase: Suggested for enterprises experiencing poor economic growth and can refer to the minimum wage increase. Enterprises that are experiencing difficulties or a deficit can choose to offer a “zero increase” if approved by the Workers’ Congress.

Enterprises should take into consideration the wage distribution for managing personnel and ordinary employees. If the wages of ordinary employees are not increased, it is not permitted to increase the wages of managing personnel.

Among the guidelines released to date in 2014, the average guidelines for Henan and Xinjiang are the highest at 15 percent, while Hubei’s average guideline is the lowest at 10 percent. Notably, the rates of increase in 2014 have been comparatively lower than last year’s rates for most provinces.

2014 guidlines chart

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