The coronavirus outbreak has become a global emergency. In an effort to slow the spread of the virus, Chinese authorities imposed quarantines and restricted travel throughout the country. National and local governments have issued various rules dealing with the coronavirus outbreak. On Jan. 24, the Office of the Ministry of Human Resources and Social Security issued a notice on the proper handling of labor relations related to the virus. Many provincial and municipal governments (including Beijing, Shanghai, Wuhan, Suzhou and Chongqing as well as the Guangdong, Shandong, and Zhejiang provinces) have issued stricter rules in accordance with authorizations provided under China’s Emergency Response law and other regulations.

National and local rules have imposed significant challenges for companies operating in China. This blog post summarizes key Chinese national and local rules governing employer obligations and provides general guidance on how foreign businesses operating in China can comply with the new rules. Because the coronavirus outbreak remains a global emergency, companies are encouraged to check local rules and laws daily to ensure compliance with the latest local regulations.

Were companies barred from resuming work?

The local government of several cities and provinces have issued rules prohibiting people from resuming work prior to specific dates, with limited exemptions and exceptions. For example, on Jan. 27, the Shanghai city government issued a notice stating that no employers were allowed to resume work prior to Feb. 10. “Resume work” is not defined in the notice, but the deputy director of the Shanghai Municipal Bureau of Human Resources and Social Security, Mr. Yuqing Fei, clarified that “resume work” means when employees may report to work at a physical location. Mr. Fei explained that employees who must work before Shanghai’s Feb. 10 return-to-work day should do so from home, instead of merely working remotely where they might be in contact with more people. Subsequent to the Shanghai notice, more than 15 cities and provinces issued notices regarding the resumption of work and provided dates for doing so, with some cities barring the resumption of work until Feb. 14. It is recommended that employers strictly abide by national and local rules and not allow employees to return to their physical work locations until the prescribed date. Absent special circumstances, companies should mandate employees work only from home and should issue a written company policy prohibiting employees from returning to the work site.

Should employees be paid wages if they are affected by coronavirus and absent from work?

globeAccording to Article 41(2) of the Law of the People’s Republic of China on the Prevention of Infectious Diseases and the Handing Notice issued by the Ministry of Human Resources and Social Security, employers must continue to pay employees who are otherwise unable to work as a result of government quarantine measures or due to other government-mandated emergency measures. Employees who are infected, suspected to be infected, or have been in close contact with actual or potentially infected persons  and miss work should not be considered absent. No wage deduction is allowed based on absenteeism, and employees must be paid regular wages. Employers are further barred from terminating the employment agreement for absenteeism.

Calculation of wages for work performed between Jan. 31 and Feb. 2

According to the Notice of the State Council on the Extension of the Spring Festival Holiday, Jan. 31 – Feb. 2 was the Spring Festival holiday. While the Notice did not explain whether those dates should be treated as a statutory national holiday or not, the general understanding is that only the first, second and third days of the Lunar New Year (Jan. 28-30) are statutory national holidays. Thus, Jan. 31 – Feb. 2 should be treated as a special national holiday or normal rest day. Accordingly, employees who worked on Jan. 28 – 30 are entitled to triple wages, and employees who worked between Jan. 31 and Feb. 2 are entitle to double wages.

Calculation of wages for work performed after Feb. 2

Notably, each local rule is different, so it is important to check with authorities where the company is located to ensure compliance. For example, Shanghai’s local rule expressly states that Feb. 2-9 are rest days with the resulting compensation requirements of time off in lieu of 200 percent overtime pay. However, in Beijing, Suzhou, Nanjing and Wuxi, those days are not treated as rest days with corresponding overtime compensation requirements.

May employees who do not work from home after Feb. 3 be placed on annual leave?

As a general matter, unless local rules provide otherwise, the delayed resumption of work issued by local authorities should be considered emergency measures and not an extension of holiday in the legal sense. Thus, employers are generally allowed to use annual vacation days to offset the time period between Feb. 3 and the date the employee resumes work unless local rules provide otherwise.

May an employer be held liable for causing the spread of coronavirus?

An employer, including its legal representative and senior management, can be held both civilly and criminally liable for causing the spread of coronavirus. Punishment includes fines, imprisonment of up to three years or criminal detention. If the consequences are especially serious, the imprisonment could be three to seven years. Moreover, individuals who refuse to implement disease prevention and control measures could be subject to fines and imprisonment of up to seven years.

How to best address prevention and control after returning to work

The coronavirus outbreak is expected to continue for an extended period of time. Employers are encouraged to distribute adequate masks, gloves, disinfectants and thermometers to all employees upon their return to work. Employers should also regularly measure employees’ temperature and disinfect office space. It is also important to timely process and report to relevant agencies any abnormal situations. Employers should, however, always consider privacy laws and not disclose confidential information.

Photo of Yuanyou (Sunny) Yang Yuanyou (Sunny) Yang

Admitted to practice in both the U.S. and the People’s Republic of China, Sunny Yang is a corporate attorney who focuses her practice on international business matters and trade. She represents Chinese entities doing business in the U.S., as well as U.S. entities…

Admitted to practice in both the U.S. and the People’s Republic of China, Sunny Yang is a corporate attorney who focuses her practice on international business matters and trade. She represents Chinese entities doing business in the U.S., as well as U.S. entities pursing investments and operating in China.

Sunny strategically applies a multicultural skill set to help her clients successfully achieve their goals. She has experience negotiating and structuring business transactions, as well as advising corporate executives in matters such as planning for the purchase of U.S. property by non-U.S. persons, transferring and protecting assets and wealth, and strategizing business succession planning.