The dispatched employees who comply with the annual leave regulations may take annual leave, in accordance with the logic and original aim of the annual leave legislation.
Annual leave for the current year may not be taken if the number of days paid by the labor dispatch unit in accordance with the law exceeds the number of days the unit should take during the period of no work;
The labor dispatching unit and the actual accepting unit shall negotiate with one another to make up the difference between the number of days of annual leave and the number of days of annual leave for the dispatched employees.
Days of Annual Leave Employee Can Take in China
| Employee Working Years | Days of Annual Leave |
|---|---|
| Less than one year | 0 |
| 1-10 years | 5 |
| 10-20 years | 10 |
| Over 20 years | 15 |
Each employee’s cumulative working years—which include hours worked for the same or various employers as well as hours classified as working time by legislation, administrative regulation, or State Council provision—will be used to determine the number of days of yearly leave that are necessary.
Additionally, statutory rest days, Chinese public holidays, and other additional holidays are not included in paid annual leave (e.g., maternity leave and annual visits to family).
Conditions Employees with No Annual Leaves in China
- Employees enjoy winter and summer vacations according to the law, and the number of vacation days is more than the number of annual leave days;
- If the employee asks for personal leave for more than 20 days and the company does not deduct the salary according to the regulations;
- For employees who have taken sick leave for more than 2 months after working for more than 1 year but less than 10 years;
- For employees who have taken sick leave for more than 3 months after working for more than 10 years but less than 20 years;
- For employees who have accumulated sick leave for more than 4 months after working for more than 20 years.
In the event that the employer cannot set up annual leave owing to work requirements for the entire year, the employee’s consent must be obtained.
Since the annual leave settlement cycle takes two years to complete, the current year’s annual leave is scheduled no later than the second year.
By the conclusion of the second year, if the agreement cannot be finished, it must be settled. As a result, we frequently encounter rules like “use it before March 31 of the following year, otherwise, it would be ruled void.”
Employees Fail to Take the Annual Leave Due to Reasons Other Than Their Own
The firm must give the employee the necessary remuneration based on the number of days of annual leave they should take if they fail to take their yearly leave for non-work-related reasons.
It is important to note that this payment standard includes the employee’s compensation during the employee’s regular working hours. The payment standard is 300% of the employee’s average daily income for each day the employee should take off.
Because regular work hours are already factored into your monthly compensation based on how many days you show up, your unpaid annual leave should only be paid twice as much as your average daily wage.
However, if an employee declines to take the annual leave that the employer had scheduled for them to take and does so willingly, they will not be given this treatment and will instead simply receive their regular salary for the working period.
Employees Leave the Company
According to the employee working time for that year, when an employee leaves the company but has untaken annual leave remaining, neither the conversion method nor the payment should deduct the number of days of annual leave from the employee’s pay. However, the payment for any portion of the annual leave that is less than a full day does not deduct the annual leave salary.
The conversion method is:
- (the number of calendar days in the company in the current year/365 days) × the number of annual leave days that the employee should enjoy in the whole year – the number of annual leave days in the current year that has been arranged
- For new employees, the above formula is also applicable.
Group Travel
Instead of providing yearly leave, the company may also organise group trips for its employees. However, any such plans must respect each employee’s personal preferences; otherwise, they are not valid.
The employer must show that both it and the employees have consented to a discount on annual leave during the group trip. If employees disagree, the corporation must decide that the arranged group travel cannot reduce the annual leave of the employees, and the employees must still be paid for the annual leave that was not taken.
Employers are advised to include these rules in the employment contract or employee handbook to reduce future labor disputes.
In addition to employee annual leave, there are many other crucial issues for foreign companies to comprehend and learn in order to ensure compliance operations in China. In accordance with Chinese local laws, our service can manage all employee benefits for your business.
