Qualified employees are entitled to take statutory annual leaves in China. An employee who has worked continuously for twelve months or more is entitled to paid annual leave. The amount of statutory annual leaves an employee is entitled to is usually determined by their working experience and tenure. For foreign employees working in China, they are also entitled to take the annual leave.
Employees who have hired in China for a period of at least twelve months are eligible for paid yearly leave. The company is unable to provide days that are less than those listed below:
The number of days of annual leave required will be calculated based on each employee’s cumulative working years, which will include hours worked for the same or different employers as well as working hours defined as working time by law, administrative rule, or State Council provision.
Furthermore, paid annual leave does not include statutory rest days, public holidays in China, or other additional holidays in the country (e.g., maternity leave and annual visits to family).
In view of the current company production and business situation, employer can organize and arrange the annual leave of all of their employees, however, employer shall check each employee to see if they are agree with it or not. When employer is unable to provide annual leave to an employee or decides to postpone annual leave to the next year due to business needs, employer must obtain the consent with each employee.
Within a calendar year, annual leave days can be handled in a single or segmented manner; however, annual leave days cannot normally be carried over to the next year. Employers may schedule annual leave periods for the following calendar year if business needs need it.
During annual leave, employees salary are entitled to be equivalent to that of normal working days.
If, despite the employee’s wishes, the employer is unable to provide complete annual leave for an employee owing to business needs, employer must compensate the employee at a rate of 300% of the normal daily salary for the days of untaken annual leaves. The standard salary is already included in this payment.
An employer is required to provide annual leave to its employees; however, if an employee gives written notice that he or she does not intend or willing to take annual leave, the company is permitted to pay the employee as if it were a regular working day.
Employees’ monthly salary divided by the monthly paid days equals the daily wage for calculating untaken yearly leave (21.75).
The previous monthly salary was the average monthly compensation for the previous twelve months, excluding overtime pay. If an employee worked for the employer for less than 12 months, the average monthly compensation is calculated based on the actual working months.
When an employer terminates or lets an employment contract expire without making full payment for the annual leave days, the employer must calculate the annual leave days and pay for the untaken annual leave days based on the number of working days the employee has already worked for the employer in the current year. In the event that this value is incorrect, it will be rounded down.
The formula for such calculation is: (number of days that the employee has worked for the employer in the current year ÷ 365 days) x the number of days of annual leave the employee is entitled to in the current year – the days of annual leave which employee has already taken in this year.
If the number of days of annual leave that the employer has set aside for the employee exceeds the number of days of annual leave that the employee is entitled to base on the foregoing calculation, the employer may not take back the additional days of annual leave.
In China, there are some certain situations mentioned below that employees are not entitled to annual leave of that year:
In the year following the annual leave of that year, if an employee falls under any of the situations listed in Item 2, Item 3, Item 4, and Item 5 of Article 4 of this Regulation, he or she will not be entitled to the next year’s annual leave.
When an employee is hired under labor dispatch/PEO solution, the dispatch agency pays an employee for non-working time within the employment contract for more days than the annual leave he or she is entitled to in that year, the employee is not entitled to that year’s yearly leave. If the number of days is less than the number of annual leave days he is entitled to, the labor dispatch agency or the employer must provide him the remaining annual leave days according to the China labor dispatch employment regulation.
To minimize future labor disputes, employers are recommended to include these regulations in the employment contract or employee handbook.
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