Goverment to Fine Employers That Withhold Workers' Wages

December 17, 2004

The State Council has promulgated new labor supervision regulations, which took effect on December 1, 2004. In issuing the new rules, the State Council emphasized that employing agencies have the responsibility to ensure that they observe all labor laws, regulations, and rules. The new regulations address recovery of back wages, the ban on child labor, and control of working hours, rest time, and vacations, minimum wages, and social security payments.

Employers commonly default on wage payments to migrant workers China. The All China Federation of Trade Unions estimates that employers owe migrant workers some 100 billion yuan in back wages. Under the new regulations, employers that withhold workers' wages are subject to fines and must also pay the workers' back wages plus an additional sum equal to 50% to 100% of the total wages owed (see this article in the Beijing News online edition). The Beijing Bureau of Labor and Social Security recently inspected the construction industry, one of the worst offenders, on wage arrears, and recovered 80% of the wages owed to migrants. Employers in China's construction industry commonly withhold wages until the construction company itself is paid for its work. But most migrant workers expect to be paid before they travel home for the lunar new year holiday in late January or early February.

For further information regarding the problems associated with unpaid wages, see the labor rights section of the Commission's 2004 Annual Report.