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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 = 210.87a393a(yuan)(1)
b.
By the method of Engel Coefficient, The monthly minimum wage worked out is:
The monthly minimum wage = 127.604.87a393a(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 0.92)1 the summation of the basic
pension insurance premium and the basic medial insurance premium that shall be paid by their respective entities)}1the 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.
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