Chinese Minimum Wage Level Updated in 11 Provinces in First Half of 2017
After two years of conservative minimum wage increases, China is reporting eleven provinces have so far increased minimum wages levels in 2017, by an average of 9%.
- (1888PressRelease) August 19, 2017 - Following conservative minimum wage adjustments during the last two years, eleven Chinese provinces have so far increased minimum wage levels in 2017. On average, the increase has been nine percent.
These provinces are:
• Shanghai
• Shenzhen
• Tianjin
• Jiangsu
• Shandong
• Fujian
• Guizhou
• Shaanxi
• Gansu
• Hunan
• Qinghai
According to official data from the National Bureau of Statistics (NBS) and the Ministry of Human Resource and Social Security, the upwards adjustments made by eleven provinces in the first half of 2017, compares to only nine regional minimum wage increases in the whole of 2016. These changes must also be considered with reference to the fact that 19 regions raised the minimum wage in 2014 and 27 increased it in 2015.
In addition, it is reported that some provinces and cities have also refined their minimum wage adjustment mechanisms to provide further protections. For example, Anhui province has made changes to the minimum wage rules to guarantee workers’ right to appeal and arbitration application.
The Chinese minimum wage is the lowest amount an employer can legally pay for work performed within the legal standard working hours or specific working hours in accordance with their employment contract. The new ‘Provisions on Minimum Wage’, states that minimum wage can be one of two types:
• Monthly – applies to full-time employees
• Hourly – applies to part-time or temporary employees
The latest data shows that three areas - Shanghai, Shenzhen and Tianjin - have now broken through the CNY2000 for monthly minimum wage payments – Shanghai is now the highest paying region in China at CNY2300. Except for 2009, Shanghai has actually increased its minimum wage at least once a year. Shanghai also requires the employer to pay extra costs relating to regulations, stating minimum wage does not include “social insurance and housing fund paid by individual”.
The data also shows that all A-Class districts now exceed CNY1500 for their monthly minimum wage and, in some cases, non-A-Class provinces, for example Suzhou, now have minimum wage levels which exceed A-Class provinces. Most areas are reported to have increased minimum wages, but this is partly due to the fact they have made no adjustment for the previous two years.
When looking at the hourly minimum wage, we see that each province and city has also adjusted their levels accordingly. Tianjin’s hourly minimum wage is now the highest, at CNY20.8/hour, with Shanghai in second place at CNY20/hour.
The regulations on minimum wages state that they should be adjusted at least every two years. Provinces should conduct a thorough review before making the adjustment, looking at, among other things, rising prices and employment conditions.
At the present time, the Chinese economy is suffering downward pressure, leading to profitability problems for businesses. To alleviate this, some areas have chosen to “adjust minimum wage range reasonably” and to extend the adjustment period for minimum wages from every 2 years to every 2 or 3 years, taking into account labor costs and the profitability of enterprises. In addition, provinces like Sichuan and Guangdong, have looked at measures to slow down growth and make it more sustainable. In these cases, they have suspended increasing the minimum wage and have kept using the 2015 minimum wage standard.
Stakeholders are advised to check their business and suppliers are compliant with the local minimum wage level in order to ensure compliance with responsible purchasing policies.
For a more comprehensive review of Chinese Minimum Wage data, see Safeguard 121/17.
For detailed information on the different regions, cities and towns, see SGS China’s Minimum Wage Map. (www.sgsgroup.com.cn/zh-CN/app/china-wages-map.aspx)
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