China’s labor law provides for a 44-hour work week, but its regulations provide for a 40 hour work week and most municipalities enforce the 40-hour work week, but recognize that this workweek may not be practical for certain employees. A “flexible” working hours system is thus permitted for “senior management” as an exception to this basic hour rule.
But before an employer can implement a flexible working hours system for its employees, it must usually first secure permission to do so from the relevant Chinese government authorities. Pretty much every Chinese city has its own rules on what it requires and on what it will allow.
For example, Beijing permits an employer to use a flexible working hours system for its senior management personnel without having to obtain permission first. This system is consistent with a U.S. style “salaried employee” approach in that as far as these employees are concerned, the employer is not required to follow the 40-hour workweek rule.
One of the first issues that must be resolved to have a flexible working hours system is what is meant by the term “senior management.” The Beijing Human Resources and Social Security Bureau interprets that to mean all employees designated as such in the employer’s Articles of Association. At minimum, a company’s legal representative and general manager are certain to qualify as senior management. As for other management employees, it is important that the employer review its Articles carefully to be sure that they are indeed “senior management” and thus do not require permission from the Beijing authorities.
But like I said, other cities may have different rules. For instance, Shanghai requires permission from the authorities before you can apply a flexible working hours system to any type of employees. Moreover, even though a salaried employee approach is permissible in Shanghai, Shanghai requires an employer provide the employee with at least one day a week that is not a work day.
Making things even more complicated is that each district within a particular city may have different requirements. This is why when one of our clients seeks the advice of one of our China employment lawyers, we always contact the particular district where the client is registered so we can figure out the specific local rules our client must follow.
First, even for employees under the flexible working hours system, employers are legally required to provide adequate rest time to these employees. Though “adequate rest time” has been left undefined in some jurisdictions (Beijing is one of them), some are clear on what they require. Shanghai requires employers provide at least one day every week as rest time for their employees designated under the flexible working hours system.
Second, you often cannot avoid paying overtime simply by implementing a flexible working hours system. Even in the case of a salaried employee system, some municipalities (Shanghai and Shenzhen immediately spring to mind) require employers pay 300% of an employee’s normal wages for time spent working on a Chinese legal holiday. For this reason, we tell our clients that the safest approach is for them not to have any employee work on Chinese national holidays, if at all possible.
Employers cannot use a flexible working hours system with low level management and non-management employees, unless those employees fall under one of the following five categories:
- offsite sales personnel
- personnel permanently based out of town
- long distance transportation personnel
- non-production on-duty personnel
- others in special work positions that may arrange their own work and rest schedules.
Though it may be possible for you to secure approval from the local agency for your off-site sales managers or for your long-distance transportation employees who are constantly on the road, you must secure the requisite permission from the authorities before you can apply a flexible working hours system to any employees who fall under the above five categories.
