On 18 January 2011, the Guangdong Provincial People s Government issued the Notice on Adjusting Minimum Wage Levels for Enterprise Workers in Guangdon

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1 Minimum Wages in Guangzhou China s Highest? by Yi Juquan and Hu Qinhai 24 march 2011

2 On 18 January 2011, the Guangdong Provincial People s Government issued the Notice on Adjusting Minimum Wage Levels for Enterprise Workers in Guangdong Province (Yue Fu Han (2011) No. 15). According to the Notice, from 1 March 2011, the minimum wage for full-time employees in Guangzhou will be raised to 1,300 yuan per month and that for the part-timers will be raised to 12.5 yuan per hour. The Notice has drawn extensive public attention as this significant minimum wage hike in Guangzhou directly impacts the human resources costs of labourintensive enterprises. It has been reported that this latest minimum wage level in Guangzhou is the highest in China. Background of significant minimum wage hikes In fact, on 1 May 2010, the minimum wages for full-time and part-time employees in Guangzhou s urban areas had already been raised to 1,100 yuan per month and 10.6 yuan per hour respectively. The recent initiative by the Guangdong Provincial Government was made less than 12 months after its last minimum wage adjustment. By raising the statutory minimum wage level, it means more cash and better income protection for workers. Judging from the short interval between these two adjustments and the percentage adjusted, it is obvious that the authorities concerned are actively demanding enterprises to improve the remuneration for their workers. To some extent, the establishment of minimum wages and the revisions of minimum wage levels have reflected the level of economic development in Guangdong and the province s protection for people working there. In the current environment, it has also become a government measure to resolve the muchtalked-about recruitment challenges and labour shortages. Since early 2010, as reported, labour shortages began to strike the coastal cities such as Guangzhou one after another. The authorities concerned expected to attract more people to work in cities like Guangzhou by raising the statutory minimum wage level and improving workers remuneration. However, there are conflicting views on whether minimum wage increases can improve the remuneration for most workers and whether it is sufficient to attract migrant workers. Further proof is needed. Where can we find the highest minimum wage in China? In absolute terms, the minimum wage level in Guangzhou is arguably the highest in China. However, several facts should be noted. First, although this is a significant minimum wage hike, the level of adjustment is still reasonable. Under the Rules on Measuring Minimum Wage Standards, the appendix to Provisions on Minimum Wages (Order No. 21, Ministry of Labour and Social Security of the People s Republic of China) implemented on 1 March 2004, the monthly minimum wage in any area should be equivalent to per cent of the average monthly wage in that area, which is also a common international practice. Guangzhou has not yet published its official figures on the average employee monthly wage for 2010, while in 2009 the figure stood at 4,101 yuan. When referring to the data for 2009, it is found that the current minimum wage of 1,300 yuan per month is still far below 40 per cent of the average monthly wage. In other words, the new minimum wage of 1,300 yuan per month set by the Guangdong Government for Guangzhou has not exceeded the government s previous reasonable expected level and should be considered a normal adjustment. Second, different Chinese provinces and cities have different rules in place on the composition of minimum wage. For instance, according to notices issued by the Municipal Bureau of Human Resources and Social Security in Beijing and Shanghai on minimum wage adjustments, social security and housing fund contributions payable by workers do not constitute part of their minimum wages. In Guangzhou, however, such contributions are included in the minimum wage under the current stipulations. This can amount to a very noticeable difference. From 1 January 2011, Beijing enforced a monthly minimum wage of 1,160 yuan while Shanghai s minimum wage, effective starting 1 April 2011, will be 1,280 yuan per month. Looking at face march

3 values, the minimum wage levels of both cities are lower than that of Guangzhou s 1,300 yuan per month. However, the figures alone do not present the whole story. For example, under the relevant rules, an employee in Guangzhou who earns a minimum wage of 1,300 yuan per month has to contribute to the mandatory endowment insurance: 1,655 yuan / month 8 per cent = 132 yuan per month (the wage base is the average monthly wage in Guangdong Province in 2008, ie 2,759 yuan x 60 per cent). They also must contribute to medical insurance, which is 2,268 yuan 2 per cent = 45 yuan per month (the wage base is the average monthly wage in Guangzhou in 2008, ie 3,780 yuan x 60 per cent). In addition is the minimum housing fund, 1,300 yuan / month 5 per cent = 65 yuan per month. The total amount of all these contributions is 242 yuan per month. After deducting all these contributions, the minimum wage level in Guangzhou in 2011 would be about 1,058 yuan per month. Taking into account the minimum wage components of Beijing and Shanghai, Guangzhou s rate is lower. Impact of minimum wage levels A minimum wage is in fact a regulation on labour prices. From a legal perspective, only employees who earn less than the new minimum wage level will be affected. In practice, it is very rare for an employer to pay only minimum wages to all or most of its employees. In general, only a portion of the employees are paid at a wage level lower than the new minimum wage level. What an employer needs to do is simply raise their wages to meet the stipulations, instead of a general pay rise for all employees. Despite its mandatory nature, minimum wage itself will only create an exemplary effect on enterprises labour costs. On one hand, the government s minimum wage hikes have sent a signal to all workers who will expect significant wage growth in the future. On the other hand, wage increases for low-income workers will produce a certain ripple effect, prompting employers also to enhance the remuneration packages of higher-income employees for greater work incentive. Therefore, the rise in statutory minimum wage level will have a stronger impact on employers whose employees wages are close to the minimum wage. For employers whose pay wages significantly higher than the statutory minimum wage level, the minimum wage will mainly have an exemplary effect. It should be noted that raising the minimum wage level can help enhance work incentive of low-income employees and thus productivity, which in turn can offset the increasing labour costs to some extent. 26 march 2011

4 Points to note by employers Under Article 13 of the Provisions on Minimum Wages, where any employer pays its employees wages under the minimum wage level in contravention of relevant rules, labour administrations will order the employer to pay any defaulted wage owed to the employee within a specified period, and to provide the employee with a compensatory payment equivalent to one to five times the wages owed. As a mandatory legal provision, the minimum wage level must be strictly observed by all employers. Employers in Guangzhou need to review their signed employment contracts against the new minimum wage level. They should make timely adjustments once any wage agreed under a contract is found to be in contravention of the new minimum wage level. While wage changes may only affect a portion of the employees, an alternative is to issue written notices of wage adjustment or sign alteration or supplementary agreements according to the actual situation, instead of revising the employment contracts. Under Article 11 of the Provisions on Minimum Wages, employers shall announce any level of minimum wage to all employees at their organisations within 10 days after such levels are issued. In other words, enterprises are obliged to communicate local minimum wage levels to their employees by written announcements. Looking from another perspective, we can find that employers may narrow the wage gaps between their employees via wage adjustments by making reference to the latest minimum wage level, thus controlling their total labour costs. Conclusion The rise in minimum wage level in Guangzhou in 2011 is a normal adjustment, which is a measure by relevant authorities to address the current situation. This initiative has increased the labour costs of some employers, but at the same time provided some motivation to employees. Employers should comply with and positively respond to this change in accordance with the law. * This is an English translation. In case of discrepancies, the Chinese version shall prevail. Yi Juquan Partner, Employment Practice Beijing King & Wood (Shenzhen) Law Office Hu Qinhai Lawyer, Employment Practice Beijing King & Wood (Shenzhen) Law Office march

5 中國焦點 廣州市最低工資標準 全國最高? 尹居全及胡慶海 廣東省人民政府於 2011 年 1 月 18 日頒佈了 關於調整我省企業職工最低工資標準的通知 ( 粵府函 號 ) 根據該通知, 從 2011 年 3 月 1 日起, 廣州市全日制職工最低工資標準調整為每月 1,300 元 ( 人民幣, 下同 ), 非全日制職工最低工資標準調整為每小時 12.5 元 廣州市最低工資標準大幅提高, 直接影響勞動密集型企業的用工成本, 因此, 這一通知受到各界廣泛重視 據報道, 廣州市新定的最低工資標準屬全國最高 大幅提高最低工資的背景探究事實上, 廣州市剛於 2010 年 5 月 1 日將該市市區最低工資標準調整至全日制職工為每月 1,100 元和非全日制職工為每小時 10.6 元 廣東省人民政府作出此番舉動, 距離上一輪廣州市調整最低工資標準還不足一年 提高法定最低工資標準, 意味著勞動者可獲增加現金收入得到保障 無論從上述調整的相距時間, 或是上述調整的幅度 而言, 都可反映有關部門積極推動企業提高勞動者的薪酬待遇 最低工資標準的制定和修訂在一定程度上反映了廣東省的經濟發展水平及對勞動者的保護力度 在目前的環境下也成為了政府用以解決 招工難 用工荒 等問題的對策 據報道, 自 2010 年年初, 廣州等沿海城市就陸續出現了不同程度的 用工荒 有關部門希望通過提高法定最低工資標準, 一定程度上提高勞動者的薪酬待遇, 進而吸引更多勞動者來廣州等城市工作 當然, 提高最低工資標準後, 能否提高大多數勞動者的薪酬待遇, 是否足以吸引外來務工人員, 各界持不同觀點, 仍有待進一步驗證 哪裡推行 全國最高 的最低工資標準? 僅就最低工資標準的絕對數值來看, 可以說, 廣州市的最低工資標準目前確實高踞全國榜首 但值得注意的是 : 第一, 雖然廣東省此次大幅提高最低工資標準, 但仍屬正常的調整幅度 根據 2004 年 3 月 1 日實施 最低工資規定 ( 中華人民共和國勞動和社會保障部令第 21 號 ) 的附件 最低工資標準測算方法, 按照國際慣例, 一個地區的月最低工資標準相當於月平均工資的 40% 至 60% 廣州市 2010 年度職工月平均工資尚未公佈官方資料 2009 年度廣州市職工月平均工資為 4,101 元 即使按照 2009 年度的資料, 每月 1,300 元的最低工資標準, 仍然遠遠低於其 40% 可以說, 廣東省人民政府將廣州市新的最低工資標準確定為每月 1,300 元, 並未超出政府此前預期的合理範圍, 屬於一次正常調整 第二, 中國各省市在最低工資的組成上有不同規定 比如, 根據北京市人力資源和社會保障局及上海市人力資源和社會保障局有關最低工資調整的通知, 勞動者應繳納的社會保險費和住房公積金, 不作為最低工資的組成部分 而在廣州市, 勞動 28 march 2011

6 中國焦點 者應承擔的社會保險費和住房公積金, 按照目前的規定, 包含在最低工資之內 這一差別實在不容忽視 北京市從 2011 年 1 月 1 日開始實施的最低工資標準為每月 1,160 元, 上海市從 2011 年 4 月 1 日開始實施的最低工資標準為每月 1,280 元 從表面看, 兩地最低工資標準均低於廣州市的每月 1,300 元 但事實並非如此 具體而言, 在廣州市, 對於一個按每月 1,300 元領取最低工資的勞動者, 按照有關規定, 他需承擔的養老保險費為每月 1,655 元 8%= 每月 132 元 ( 繳費工資為 2008 年度廣東省職工月平均工資 2,759 元的 60%) 醫療保險費為每月 2,268 元 2%= 每月 45 元 ( 繳費工資為 2008 年度廣州市職工月平均工資 3,780 元的 60%) 住房公積金至少為每月 1,300 元 5%= 每月 65 元, 合計每月 242 元 如果參照北京市和上海市的最低工資組成規定進行換算, 廣州市 2011 年度的最低工資標準大約為每月 1,058 元, 但仍低於京滬兩地現行的最低工資標準 評析最低工資標準的影響最低工資標準實際上是對勞動力價格的管制, 在法律上, 僅對那些現有工資水平低於新的最低工資標準的勞動者產生影響 在實際情況下, 用人單位擬向全體或絕大多數員工支付最低工資極其罕見, 一般來說, 僅有部分員工的現有工資水平低於新的最低工資標準 用人單位只需將相關員工的工資標準提高即可, 而無須提高全體員工的工資標準 雖然最低工資標準本身是強制實施的, 但其對於企業用工成本的影響, 更多地還是一種示範性的效應 一方面, 政府大幅提高最低工資標準, 向所有勞動者都傳遞了工資增長的信號, 使其產生今後工資將大幅增長的心理預期 另一方面, 低收入勞動者工資的增長, 也將在一定程度上產生漣漪效應, 促使用人單位同時提高高收入勞動者的工資水平, 以實現有效的工作激勵 由此可見, 法定最低工資標準的提高, 對於員工的工資水平大多接近法定最低工資標準的用人單位的影響較大, 但對於員工的工資水平明顯高於法定最低工資標準的用人單位則主要是一種示範性的影響 需要指出, 最低工資標準的提高, 能夠提高低收入勞動者的工作積極性, 從而提高其工作效率 而勞動者工作效率的提高, 又能在一定程度上抵消用工成本的增長 用人單位的應對策略首先, 根據 最低工資規定 第 13 條, 用人單位違反規定向員工支付低於最低工資標準的工資, 由勞動行政部門責令其限期補發所欠勞動者工資, 並可責令其按所欠工資的 1 至 5 倍支付勞動者賠償金 最低工資標準屬強制性法律規定, 用人 單位必須嚴格遵守 廣州市的用人單位需要結合新的最低工資標準, 對本單位已簽訂的勞動合同進行審核 如發現勞動合同約定的工資違反新的最低工資標準, 應當及時調整 由於僅涉及部分員工的工資調整, 調整方式並不局限於修改勞動合同, 用人單位亦可按照實際情況發出工資調整的書面通知 與員工簽署書面的變更協定或補充協定 其次, 最低工資規定 第 11 條規定 : 用人單位應當在最低工資標準發佈後 10 日內將該標準向本單位全體勞動者公佈 也就是說, 企業有責任向員工公佈當地的最低工資標準 用人單位可以採取書面公告方式, 及時向全體勞動者公佈當地的最低工資標準 第三, 從另一個角度看, 用人單位在遵守新的最低工資標準時, 可以通過調整工資的分配結構等方式, 適當收窄企業內部員工之間的工資差距, 以控制企業的總體用工成本 結語廣州市 2011 年度最低工資標準的提高屬於正常調整, 也是有關部門根據現實情況所採取的應對措施 這項舉措提高了部分用人單位的用工成本, 但同時也在一定程度上對勞動者起了激勵作用, 用人單位應當依法遵守, 積極回應 尹居全北京市金杜 ( 深圳 ) 律師事務所勞動業務組合夥人 胡慶海北京市金杜 ( 深圳 ) 律師事務所勞動業務組律師 march