Employees in Shanghai may have questions such as:

- Can working on New Year's Day be compensated with compensatory time off in lieu of overtime pay?

- Can wages be replaced by shopping vouchers?

- Can wages be replaced by training subsidies during training periods?

- Can employees under an annual salary system be paid once every two months?

- Is daily pay calculated based on actual calendar days?

- If an employer arranges New Year's Day duty shifts, is overtime pay required?

To help employees better understand their rights and relevant regulations, the Shanghai Municipal Bureau of Human Resources and Social Security has answered these frequently asked questions.

1.Can working on New Year's Day be compensated with compensatory time off in lieu of overtime pay?

Case:

David is an employee at a large shopping mall. Since the mall was going to hold a New Year's Eve event, he was notified to work overtime on Jan 1. However, the employer told him that he would be given one day of compensatory time off the following week in lieu of overtime pay. He wonders whether working on New Year's Day can be compensated with compensatory time off in lieu of overtime pay.

Answer:

No. According to the "Shanghai Enterprise Wage Payment Measures", regardless of the working hour system, if an employer arranges for an employee to work on a statutory holiday, the employer shall pay no less than 300 percent of the employee's daily or hourly wage.

In this case, the employer must pay overtime wages at three times the normal rate and cannot simply offer compensatory time off to David.

2. Can wages be replaced by shopping vouchers?

Case:

Mike joined an e-commerce company in late December, with an agreed monthly salary of 6,000 yuan. Since Mike only worked for three days in December, to simplify processing, the employer gave him a supermarket shopping voucher worth 600 yuan as payment for the three days of work. Is this legal?

Answer:

No. According to the "Shanghai Enterprise Wage Payment Measures", wages refer to labor remuneration paid by an enterprise to an employee in monetary form in accordance with national and municipal regulations, including time wages, piece wages, bonuses, allowances, subsidies, and overtime pay. The "Interim Provisions on Wage Payment" also states that wages shall be paid in legal tender and shall not be replaced by in-kind payments, negotiable securities, or other forms.

In this case, using a supermarket shopping voucher to replace Mike's wages is illegal.

3.Can wages be replaced by training subsidies during training periods?

Case:

Nancy was hired by a technology company. She signed a training agreement stating that she would first undergo two months of training, during which she would receive a monthly training subsidy of 2,000 yuan. After the training, if she passed the company's assessment, she would sign a labor contract and receive a formal salary of 8,000 yuan per month. In fact, after joining the company, Nancy performed regular work duties and clocked in normally. Is this practice legal?

Answer:

No. As long as an employment relationship has been established and the employee has performed normal work, the employer must pay wages in accordance with relevant regulations and agreements, and the amount must not be lower than the monthly minimum wage standard. Paying subsidies instead of wages during a training period is illegal.

Reminder:

An employment relationship is established when all the following requirements are satisfied, even if a written labor contract has not been signed:

(1) Both the employer and the employee meet the legal qualifications required to enter into an employment relationship.

(2) The employer's labor rules and regulations apply to the employee, who is subject to the employer's labor management and performs compensated labor arranged by the employer.

(3) The labor performed by the employee forms part of the employer's business.

4.  Can employees under an annual salary system be paid once every two months?

Case:

When James signed a labor contract with a technology company, the employer proposed that he would be paid once every two months because he would be under an annual salary system. He wondered if this practice was legal.

Answer:

No. According to the "Shanghai Enterprise Wage Payment Measures", an enterprise must pay wages at least once per month. The specific date for wage payment shall be agreed upon between the employer and the employee.

For employees under an annual salary system or whose wages are paid based on an assessment cycle, the enterprise shall prepay wages monthly at no less than the minimum wage standard and settle the balance at the end of the year or at the end of the assessment cycle.

5. Is daily pay calculated based on actual calendar days?

Case:

Helen joined a clothing company last December. After New Year's Day, she submitted her resignation for personal reasons. Since she had worked only 10 days in total, the company calculated her daily wage by dividing her monthly salary of 6,000 yuan by 31 days, then paid her 10 days' wages accordingly. Is this calculation method correct?

Answer:

No. According to the "Shanghai Enterprise Wage Payment Measures", the daily wage is calculated by dividing the monthly wage by the average monthly wage-payment days of 21.75. The hourly wage is calculated by dividing the daily wage by eight hours.

In this case, the company should have calculated the daily wage by dividing 6,000 yuan by 21.75, then multiplying the result by the 10 days Helen actually worked.

Reminder: Employees are entitled to paid statutory holidays even if they do not work.

6. If an employer arranges holiday duty on New Year's Day, is there overtime pay?

Case:

Every statutory holiday, Edward's company arranges for middle-level and senior management employees to take turns on duty, but does not pay overtime. Is this legal?

Answer:

(1) The difference between overtime work and duty shifts:

- Overtime refers to an employer arranging for an employee to work beyond the legally prescribed standard working hours.

- Duty refers to work unrelated to the employee's regular duties that an employer temporarily arranges, or arranges under company rules, due to safety, fire prevention, holidays, or other needs. It may also refer to work that is related to the employee's regular duties but allows the employee to rest during the duty period and does not involve production responsibilities.

(2) How can overtime work and duty shifts be distinguished?

- Whether the employee continues to work in their original position or performs specific production or operational tasks;

- Whether the employee can rest during the duty period.

(3) Compensation rules for overtime and duty shifts:

- For duty shifts, compensation is generally paid according to the employer's policies, collective contract, special collective agreement, labor contract, or customary practice.

- If an employer arranges for an employee to work overtime, the employer must pay overtime wages at no less than the legally required standard.

In this case, if the duty arrangements for the company's management employees at or above the middle level meet the above conditions, the company does not need to pay overtime wages, but should pay duty-related compensation in accordance with regulations.

 

Disclaimer: This article is for general reference only and does not constitute legal advice. For specific cases, please consult the competent authorities or a qualified legal professional.

 

Source: Official WeChat account of the Shanghai Municipal Bureau of Human Resources and Social Security (ID: "shrsjwx")