China’s labor force has undergone a significant transformation in recent years, moving from dependence on state-owned businesses to much more independent management of the forces of the modern market economy. Instead of the government being directly in control of labor-related operations, obligations to support sick employees have been moved to private sectors such as the government’s social insurance fund and insurance companies.
According to Chinese Labor Law, the sick leave system is established for employees who are ill or injured unrelated to their jobs. The labor agreement cannot be terminated by the employer during the time the employee is receiving medical care, and the sick leave wage must be paid.
Employees in China are entitled to a period of medical care for illnesses or accidents unrelated to their jobs that can last anywhere between three and twenty four months. The time frame varies according to the number of years that have passed since the employees first began working and how long they have worked for their current employer.
The allocation of China’s sick leave is divided as follows:
| Year of work experience | Years with current employer | Allowed sick leave length |
|---|---|---|
| ＜10 years | ＜5 years | 3 months |
| ＜10 years | ≥ 5 years | 6 months |
| ＜10 years | ＜5 years | 6 months |
| ≥ 10 years | ≥ 5 years, ＜10 years | 9 months |
| ≥ 15 years | ≥ 10 years, ＜15 years | 12 months |
| ≥ 20 years | ≥ 15 years, ＜20 years | 18 months |
| ≥ 20 years | ≥ 20 years | 24 months |
Sick leave is typically paid at a reduced rate that ranges from 60 to 100% of daily pay and is generally mandated to be paid for all employees (foreign and local Chinese). The seniority of the employee, the city, and its laws all play a role in this, though. The Rules on Labor Insurance and Chinese local regulations must be consulted to determine the length of sick leave. The following table provides an overview of the China sick leave wages as a percentage of salary in the function of seniority in Shanghai.
| Years of consecutive service at the company | Sick-leave wage as a percentage of an employee‘s salary |
|---|---|
| < 2 years | 60% |
| 2–4 years | 70% |
| 4–6 years | 80% |
| 6–8 years | 90% |
| > 8 years | 100% |
Years of consecutive service at the company | Sick-leave wage as a percentage of an employee‘s salary |
|---|---|
| < 1 year | 40% |
| 1–3 years | 50% |
| > 3 years | 60% |
Sick Leave Certificate Been Officially Approved
An employee in China must visit a hospital and obtain a “official approval of sick leave certificate” before being granted sick leave. The patient is given a careful examination by the doctor. The doctor offers the certificate if they find that the patient is ill or has sustained an accident unrelated to their line of employment. The employee then gives the employer this certificate and starts the sick leave period.
Employers’ Obligations
- Not terminating an employee during his/her statutory sick-leave period. Termination after expiration of a sick-leave period is subject to certain procedures.
- If the employee’s labor contract expires during his/her sick-leave period, employers must automatically extend the term of the contract until the end of the sick-leave period.
- Pay the employee’s sick-leave wage according to their seniority for the entire duration of the treatment period duly certified by a physician.
Additionally, a company is not permitted to fire an employee while they are on sick leave and is required to pay them a sick leave salary. According to Chinese national legislation, an employee with a non-work-related illness or injury is entitled to a sick leave duration ranging from 3 to 24 months, based on how long the employee has worked for the business and how many years the employee has worked overall.
Procedure to Justify Sick Leave
Chinese labor law mandates that if an employee becomes ill or sustains an injury unrelated to the workplace, they must visit a hospital and obtain a formal certificate from the physician. An “official permission of sick leave certificate” can only be given to an employee after a complete medical examination by a hospital doctor. The employee will proceed with the sick leave time after submitting the official certificate to his or her company.
How China Payroll Can Help with China Sick Leave Issues
When hiring employees in China, you must abide by all applicable labor laws, particularly those pertaining to sick leave. Many new enterprises, however, are unfamiliar with these Chinese laws and may unintentionally disobey them, which can cause serious compliance problems.
As China’s experienced employment expert, China Payroll can carry this load for you. In this capacity, we act as the employee’s direct employer and assume all liability issues related to recruiting workers in China, relieving you of these worries while enabling you to take advantage of having a local workforce at your disposal.
Contact us today to learn how our local PEO (Professional Employer Organization) services can get you running in China without fear of new or unfamiliar local requirements.
