China’s Labor Contract Law specifies an employer’s obligation regarding the provision of rest days, statutory holidays, and annual leave. From the employee’s perspective, China’s holiday and vacation/leave policies are relatively unfavorable by comparison with those of other countries, in some cases barely passing the minimal requirement set forth by the International Labor Organization.
Thus, many foreign and domestic companies choose to go beyond the legal minimum and offer employees more annual leave and rest days. More competitive labor markets in China may necessitate this to attract and retain quality employees.
Tired of scrolling? Download a PDF version for easier offline reading and sharing with coworkers
In a hurry? Save this article as a PDF
Tired of scrolling? Download a PDF version for easier offline reading and sharing with coworkers.
Fill up the form below 👇🏼
China Labor Law Guide on Annual Leave and Holidays
Employees are entitled to one full rest day in a seven-day period. This must be a full 24-hour period in which the employee does not work. Companies are permitted to organize rest days around production and work schedules. Regular rest days in China typically fall on Saturday and/or Sunday, though this is not a legal requirement.
- New Year’s Day
- Lunar New Year’s Day (Called Chinese New Year or Spring Festival)
- Qing Ming Festival (Tomb-Sweeping Day)
- Labor Day (falls on the 1st of May)
- Dragon Boat Festival
- Mid-Autumn Festival
- National Day (falls on the first day of October)
When a Holiday Occurs on a Rest Day
When a holiday falls on a Saturday or Sunday, the following day is substituted as the rest day.
The employer must pay the employee the full wage during a holiday. The wage can be calculated as the average daily wage based on the employee’s history.
Work During Holidays
An alternative holiday arrangement can be made but must occur no more than 60 days before the statutory holiday.
Employment Vacation Policy
Minimum Annual Leave
According to Chinese employee vacation law, the statutory minimum annual leave is based on the employee’s years of work experience. Chinese leave policy is not generous by comparison to most Western companies. Companies may offer more leave, so long as it is formalized in company policy and the employee is notified. Writing it in the HR handbook should suffice.
There are circumstances in which the employee is not entitled to the standard leave provision:
- If the employee takes 20 or more days of personal leave without salary deducted.
- For employees that have taken sick leave of 2 months or longer, provided that the employee has worked between 1 and 10 years.
- For employees that have taken sick leave of 3 months or longer, provided that the employee has worked between 10 and 20 years.
- For employees that have taken 4 months or longer of paid annual leave, provided the employee has worked 20 or more years.
- If the employee is entitled to a seasonal holiday (Summer or Winter holiday) that is at least as long as the annual leave.
Leave does not include rest days or public holidays
Compensation for Unused Annual Leave
Employers are required to compensate the employee for untaken paid leave. In addition to regular salary, the employer is required to pay the employee 200% of the employee’s daily wage for each day of untaken paid leave, where:
Daily wage = monthly salary / 21.75
INS Global: HR and Labor Law Support
It takes a lot of work and time to incorporate a business in a foreign market, and you often need to become an expert with every area of local law. The complications and expenses of forming an overseas business might sometimes occur at inconvenient times, diverting attention from other duties that are more crucial to achieving development and success objectives.
With the aid of a PEO (Professional Employer Organization), a business may enter a new market without taking the time to set up and incorporate a new corporation. Contact us today to learn more.