Saw the following comment today and thought it would make sense to respond via this blog post, rather than directly:
I never seem to have any luck getting a response on Facebook so I’ll repeat a query here: is it legal to pay the standard 13th month bonus without specifying it in the labour contract? My understanding was that the annual bonus is discretionary, unless you make it otherwise.
We have written thousands of posts and almost all of them get some comments. Some get a lot of comments. Some get more than 200 comments. Many of those comments are questions. We review the comments to determine whether they are spam and if they are not we post them — with a few very rare other exceptions.
Our China lawyers simply do not have the time to read and respond to all of the comments. Sorry.
We are always going to be reluctant to respond to comments that seek from us what is essentially a legal opinion, like the one above. In large part because there is seldom an easy answer for legal questions. Why do you think lawyers charge by the hour?
First off, what is meant by “without specifying it in the labour contract”? Specifying that the 13th payment is discretionary? Specifying that any 13th payment is discretionary? Or not saying anything at all about a 13th payment? These three things can be very different.
If the contract mentions a 13th payment but says it is discretionary but the employer has made the 13th payment for the last 20 years and has on many occasions told its employees to expect it every year, how discretionary is it? Has it now de facto become mandatory? Can you see why this situation might be different from a situation where the contract makes clear the employer may from time to time make a 13th payment but doing so does not waive its right not to make a 13th payment and that employer only makes a 13th payment every few years? Can you see why both of these might be different from a situation where the contract is completely silent about a 13th payment but the employer has made one every year for twenty years or has made one only every few years? The comment itself implicitly seems to recognize this, by stating the belief that the 13th month is discretionary, unless the employer makes it otherwise. Our job as attorneys is to determine whether the employer has “made it otherwise.”
Many times our clients tell us their contracts say one thing when they actually say the opposite. Many times our clients are working with an English language contract that says one thing when the official Chinese language version says another. Many times our clients think they have an enforceable contract when under Chinese law they really don’t. Many times our clients think they don’t have an enforceable contract under Chinese law when they really do. See China LOI and MOU: Don’t Let Them Happen to You. Does this commenter have enforceable written employment contracts with his employees or not? Are those contracts in just English or just Chinese? If they are in both languages, are they clear about the official language or are they explicitly dual-language contracts? All this could influence both what this commenter wrote to us and, more importantly, the legal reality.
And then there is the fact that so much of China’s employment laws are local. See China Employment Law: Local and Not So Simple. Maybe Shanghai treats this situation (and again, we do not even know what the situation really is) completely differently than Qingdao. Even if we did know where this person is located, we could not answer unless we had that very week answered the very same question with the very same relevant facts in the very same city, unless we were to spend hours reading the local rules for this person’s particular city and then spend more time trying to reach the appropriate local government official and then speaking with that official to confirm our legal research.
I wrote this post in less than 20 minutes. If I had spent more time on it and if I had circulated it to some of the other China attorneys in my office (especially if I had sent it to Grace Yang, our lead China employment lawyer), I am certain we together could easily have written at least another ten paragraphs as to why we cannot give any real answer to the above comment without knowing more and without doing our research.
A few weeks ago, Grace wrote an article, DIY China Employment Law. Really? [link no longer exists] on the problems she sees with foreign companies trying to handle their China employment law matters without a lawyer. Our giving knee-jerk answers to China legal questions would be the China lawyers equivalent.
So for future questions regarding your specific legal issues, please consider the below to be our answer:
We do not know enough to be able to answer your question. For us to be able to answer your question we would need to know a lot more facts and then we would need to conduct legal research into the written laws for wherever it is that you are located and then we would probably want to discuss your situation and our legal findings with the relevant Chinese government officials as well. Until we do these things, we simply cannot give you an answer that would be helpful to you.