Provisions on Minimum Wages (Chinese and English Text)

The following translation was retrieved from the Invest in China Web site on May 29, 2013. The Chinese text was retrieved from the Chinese central government Web site on October 30, 2006.

Promulgation Date： 2004-01-20 Promulgation Number： 2004012020040301

Ministry of Labor and Social Security

Order of the Ministry of Labor and Social Security of the People's Republic of China No. 21

The Provisions on Minimum Wages, which were adopted at the 7th executive meeting of the Ministry of Labor and Social Security on December 30, 2003, are hereby promulgated and shall come into force as of March 1, 2004.

Zheng Silin, the Minister of the Ministry of Labor and Social Security January 20, 2004

Provisions on Minimum Wages

Article 1 With a view to safeguarding the legitimate rights and interests of the laborers in getting labor remunerations, and ensuring the basic necessities of laborers and their family members, the present Provisions are formulated according to the Labor Law and other relevant regulations of the State Council.

Article 2 The present Provisions shall apply to the enterprises, private non-enterprise entities, individual industrial and commercial households with employees (hereinafter collectively referred to as employing entities) and the laborers who have formed a labor relationship with those employing entities.
The state organs, public institutions and social bodies and the laborers who have formed a labor relationship with them shall accord with the present Provisions.

Article 3 The term " standards on minimum wages" as mentioned in the present Provisions refers to the minimum labor remunerations that shall be paid by the employing entities according to law under the precondition that the laborers have provided normal labor within the promissory working hours or within the working hours as prescribed in the labor contracts concluded according to law.
The term "normal labor" as mentioned in the present Provisions refers to the labor undertaken by a laborer, pursuant to the contract concluded according to law, within the promissory working hours or within the working hours as prescribed in the contract. A laborer's enjoying paid annual vocation, home leave, marriage or funeral leave, maternity leave and conception-control operation leave and his (her) participating in any social activities during the promissory working hours shall be deemed as having offered normal labor.

Article 4 The administrative departments of labor and social security of the people's governments at or above the county level shall be responsible for the supervision and inspection over the employing entities' fulfillment of the present Provisions within their respective administrative areas.
The labor unions of all levels shall conduct supervision over the implementation of the present Provisions according to law. Where a labor union finds that any employing entity pays employees wages in violation of the present Provisions, it shall have the power to demand the local administrative department for labor and social security to deal with the case.

Article 5 In general, the standards of minimum wages appear in two forms, namely the monthly minimum wage standard and the hourly minimum wage standard. The monthly minimum wage standard applies to full-time employees while the hourly minimum wage standard to non-fulltime employees.

Article 6 When determining and regulating the monthly minimum wage standard, one should take into consideration factors such as the minimum costs of living of the local employees and the people supported by them, the urban residents' consumption price index, the social insurance premiums and the public accumulation funds for housing paid by the employee themselves, the average wage of the employees, the level of economic development, the status of employment and etc..
When determining and regulating the hourly minimum wage standard, one shall, on the basis of the announced monthly minimum wage standard, take into consideration such factors as the basic pension insurance premiums and the basic medical insurance premiums that shall be paid by the entity. In addition, one shall appropriately take into consideration the disparities between the non-fulltime laborers and the fulltime laborers in the aspects of working stability, condition, intensity and welfare, etc ..
For the specific calculating methods for the monthly minimum wage standard and the hourly minimum wage standard, please read the Attachment.

Article 7 Different administrative areas within a province, autonomous region or municipality directly under the Central Government may adopt different standards of minimum wages.

Article 8 The program for determining and regulating the standards on minimum wages shall be formulated by the administrative department of labor and social security of the people's government of a province, autonomous region or municipality directly under the Central Government in consultation with the labor union, the league of enterprises (or the association of entrepreneurs) at the same level, which shall be reported and submitted to the Ministry of Labor and Social Security. Such a program shall include the basis, applicable scope, drawn-out standards and explanations on the determination and regulation of the minimum wages. The Ministry of Labor and Social Security shall, after receiving the program, collect opinions of the China Labor Union and the China League of Enterprises (or the China Association of Entrepreneurs).
The Ministry of Labor and Social Security may provide advice on the revision of the program. If it fails to provide any advice on revision within 14 days from the day when it receives the program, it shall be deemed as having granted consent.

Article 9 The administrative department of a province, autonomous region or municipality directly under the Central Government shall report its program on the standards on minimum wages applicable in their respective areas to the people's government of this province, autonomous region or municipality directly under the Central Government, and shall, within 7 days from the day when the program is approved, announce it through the bulletin of the local government and at least one newspaper circulated widely in the area. The administrative department of labor and social security shall report the standards on minimum wages to the Ministry of Labor and Social Security within 10 days from the day when the program is announced by the administrative department of the province, autonomous region or municipality directly under the Central Government.

Article 10 If the related factors as prescribed in Article 6 of the present Provisions change, after the standards on minimum wages have been announced for implementation, they shall be regulated in good time. The standards on minimum wages shall be regulated at least once every two years.

Article 11 The employing entities shall, within 10 days from the day when the standards on minimum wages are announced, announce the standards to all their laborers thereof.

Article 12 In the event that a laborer has provided normal work, the wage paid by the employing entity shall, after being deducted of the following items, not be less than the local standards on minimum wages:
(1) wages paid for extra work done after the promissory working hours;
(2) allowances given for the middle shift, night shift, and for working under special environmental conditions such as high temperature, low temperature, downhole operation, venomousness and nocuousness;
(3) the welfare treatments to laborers as prescribed in the laws, regulations and by the state.
On the basis of the scientific and reasonable labor quota, an employing entity that adopts the way of paying wages by piece or by deducting a percentage, shall not pay the laborers less wages than the corresponding standard minimum wages.
In case a laborer, for his own reasons, fails to provide normal labor within the promissory working hours or within the working hours as provided for in the lawfully concluded labor contract, this Article shall not apply.

Article 13 Where an employing entity violates Article 11 of the present Provisions, it shall be ordered to make corrections by the administrative department of labor and social security. If it violates Article 12 of the present Provisions, it shall be ordered to make up the wages owing to the laborers by the administrative department of labor and social security, and may be ordered to pay laborers compensations in the sum of one to fives times of the wages owed within a time limit.

Article 14 Where there arises any dispute over the standards on minimum wages between laborers and employing entities, it shall be coped with according to the provisions on labor disputes.

Article 15 The present Provisions shall come into force as of March 1, 2004. The Provisions on Minimum Wages in Enterprises promulgated by the former Ministry of Labor on November 24, 24, 1993 shall be repealed simultaneously.

Attachment:

The Methods for Calculating Minimum Wages
1. Factors to be taken into consideration when determining the standards on Minimum Wages
When determining the standards on minimum wages, one shall generally take into consideration the following factors as the living costs of urban residents, the social insurance premiums and the public accumulation funds for housing paid by employee themselves, the average wage of the employees, the rate of unemployment and the level of economic development. The formula may be:
M = f (C, S, A, U, E, a )
M: the standards on minimum wages
C: the average living costs of urban residents;
S: the social insurance premiums and the public accumulation funds for housing paid by employee themselves;
A: the average wage of the employees;
U: the rate of unemployment;
E: the level of economic development;
a: the factors.
2. The universal methods for determining the standards of minimum wages
(1) The proportion method, that is firstly to determine a certain proportion of families with the minimum average income as poverty families in light of the investigation materials of the family livelihood of urban residents, then to calculate the average living cost of the poverty families and multiply it by the coefficient of the people supported by each employee, and finally to make the result plus an adjustment.
(2) The Engel Coefficient method, that is to calculate the minimum expense standard for food pursuant to the annual standard cookbook and the standard quantity of food taken by people as offered by the National Nutrition Academy as well as the market prices of the standard food, then to divide the minimum expense standard for food by the Engel Coefficient, thus to work out the standards on minimum living costs, to multiply the minimum living costs by the coefficient of people supported by each employee and finally to make the result plus an adjustment.
After working out the standards on monthly minimum wage by the above-mentioned methods, one shall take into consideration the following factors to make necessary amendment as the social insurance premiums paid by the employee themselves, the public accumulation funds for housing paid by the employee themselves, the average wage of the employees, social assistance grants and the standards on unemployment premiums, the status of employment and the level of economic development.
For example, if, in a certain region, the minimum monthly living cost of persons within the groups of minimum income is 210 yuan, the coefficient of the people supported by each employer is 1.87, the minimum expense for food is 127 yuan, the Engel Coefficient is 0.604, the average wage is 900 yuan.
a. By the proportion method, the standard on monthly minimum wage worked out is:
The monthly minimum wage = 210×1.87＋a＝393＋a(yuan)(1)
b. By the method of Engel Coefficient, The monthly minimum wage worked out is:
The monthly minimum wage = 127÷0.604×1.87＋a＝393＋a(yuan)(2)
In the formulas (1) and (2) the adjustment "a" mainly involves the expenses for the pension, unemployment and medical insurance premiums and the public accumulation funds for housing.
In addition, as it is universally considered that the monthly minimum wage is equivalent to 40-60% of the average monthly wage, the monthly minimum wage of this region shall be ranged from 360 yuan to 540 yuan.
The standard of the hourly minimum wage = {(the standard of the monthly minimum wage ÷20.92÷8)×(1＋ the summation of the basic pension insurance premium and the basic medial insurance premium that shall be paid by their respective entities)}×(1＋the floating coefficient)
The determination of the floating coefficient shall mainly take into consideration the disparities between the fulltime employees and the non-fulltime employees in the aspects of working stability, conditions and intensity and welfares.
Every region may rationally determine the standards on monthly and hourly minimum wages by referring to the calculating methods mentioned above and in light of the local actual circumstances.

Promulgated by Ministry of Labor and Social Security on 2004-1-20