Communications Ministry Orders Push to Resolve Unpaid Migrant Wage Claims

July 28, 2006

The Ministry of Communications, which oversees China's transportation sector, instructed its provincial-level departments to finish resolving migrant workers' claims for unpaid wages from work on transportation projects by the end of 2006, according to a June 28 Ministry circular posted on the central government's Web site. The Ministry circular responds to a 2004 State Council decree to resolve all migrant worker wage arrears that have resulted from unpaid debt on government projects. The deadline to conclude payment is December 2006. As of April 19, the Ministry claimed it had resolved 92 percent of the debt claims on transportation projects, a slightly higher rate than for the construction sector as a whole.

The Ministry of Communications, which oversees China's transportation sector, instructed its provincial-level departments to finish resolving migrant workers' claims for unpaid wages from work on transportation projects by the end of 2006, according to a June 28 Ministry circular posted on the central government's Web site. The Ministry circular responds to a 2004 State Council decree to resolve all migrant worker wage arrears that have resulted from unpaid debt on government projects. The deadline to conclude payment is December 2006. As of April 19, the Ministry claimed it had resolved 92 percent of the debt claims on transportation projects, a slightly higher rate than for the construction sector as a whole.

The Ministry circular describes a detailed plan for resolving transportation sector debt and migrant worker wage arrears. The circular urges communications department officials at all levels to ensure that construction costs are paid, including unpaid wages to migrant workers, according to the law and contractual obligations. The circular also instructs each provincial communications department to investigate its debt situation to determine the amount of money owed and determine who is responsible for payment. The circular said that provincial departments are directly responsible for monitoring debt repayment.

Overdue payments for transportation projects funded by the central or provincial governments should be made as soon as possible, while local governments should ensure that their debts are repaid by the end of 2006. Officials should also develop mechanisms to manage expense accounts and estimates for transportation projects. The Ministry itself will investigate all provincial communications departments that have large unpaid debts and have been slow in making payments. The Ministry circular directs provincial-level communications departments to deal with subordinate enterprises that refuse to sign or carry out repayment agreements by making their names public through the news media, strictly limiting their market access and bidding qualifications, and in serious cases, reducing or canceling their business credentials.

Despite the Ministry's assertions of increased vigilance and the circular’s emphasis on addressing the fundamental causes of wage arrearages, 260 workers on the new subway line being built in Beijing municipality for the 2008 Olympics have not been paid for more than a year, according to a June 23 report in the Daily Telegraph. The workers were rural migrants from Shandong province, and they were to be paid 10 yuan (US$1.25) per day, a low wage rate even by Chinese standards, the report said.

Hong Fuzeng, a member of Chinese People's Political Consultative Conference, called for new laws to protect migrant workers, according to a March 9 China Daily report. Noting that delayed payment of wages is a "major headache" for migrants, the report quoted a 2005 National People's Congress survey finding that about 8 percent of workers in 40 cities surveyed said their wages had been delayed an average of three months during 2004. National People’s Congress member Fang Chaogui, who also directs Guangdong province’s Bureau of Labor and Social Security, called for criminal penalties against employers who fail to pay workers on time, according to the China Daily report.

Guangdong provincial authorities adopted another solution to the unpaid wage problem by blacklisting 30 enterprises for defaulting on more than 20 million yuan (US$2.5 million) owed to more than 8,000 employees, according to a June 26 China Daily report. Some experts suggest that companies be required to deposit a certain amount before starting business; when a company defaults on wages, the deposited funds could be used to pay workers, the report said. The Shenzhen Special Economic Zone and other cities have introduced such a system, a court official in Guangzhou city told the reporter.

Shaanxi provincial officials took another approach to the problem by issuing regulations on July 1 that require employers to pay an additional 50 to 100 percent of the total wages owed if they do not pay workers fully within a time limit set by local authorities, according to the June 8 edition of the Xi’an Evening News, reprinted in the June 13 edition of the China Labour Bulletin.