Remember my question “How employer defend when employee claim for compensation?” I would say majority are fictitious (虚构) and others are truly protected by China Labor Law. Compensation could consists of wages, incentives, allowance, medical fees and other ridiculous monetary like psyche injury fees (精神损失费) and is acknowledged by local law!
Wages compensation depends on number of years signed between company and workers, 1 year contract 1 month compensation, 2 years contract 2 months and so forth. Therefore usually workers would not blackmail on this category as already enforced by local law, but if company didn’t sign labor contract with workers within 1 month, the penalty is 3 months wages compensation. Therefore is very important to give your trustworthy production head to sign labor contract on behalf of company, please refer back to “How to tackle China Labor Laws #1″. This could give pressure to your production people responsible and pay more attention to new workers and workers evaluation during probation period before is too late to salvage.
Don’t forget if your payroll didn’t separate normal working hours and overtime hours, workers could easily blackmail company to recompense their overtime wages from the day they starts work! This is a common trick because laws states that working more than 8 hours per day accumulative 40 hours per week and beyond this limit are all treated as overtime. Eventough if you explain their monthly pay already includes overtime in black and white with workers signature but the local laws stands the final justice! Example minimum wage RMB770 but company pays RMB1000, workers agree on salary including overtime but according to Labor Laws overtime calculation you still underpay to workers hence they have the rights to pursue all overtime wages from the very beginning! Therefore only way is to settle all wages immediately on the spot during workers fire out otherwise they will have time to calculate and investigate. Because there is one loophole in Labor Laws, once workers agree to sign and rescind labor contract there is no dirty tricks for them to blackmail company in the future!
Incentive and allowances in monetary if is stated in labor contract company have to compensate according to the number of monthly wages compensated. If your incentives and allowances are regulated by workers performance or attitude, if you holds their documentation proof on violations, company have the rights to forbid compensation. Therefore all warning letters must be kept properly to prevent workers deny in the future and blackmail company.
Medical fees has no standard if is proven as industrial injury (工伤). If you buy social insurance (社保) for workers but if the medical fees goes beyond government social security compensation limit, the balance company has to compensate. Therefore the only way to protect yourself is to buy another additional injury insurance to compensate the balance difference to minimise your losses. When major accidents happen causing major life losses the compensation could makes you bankrupt hence is necessary to buy extra coverage from private insurance company.
Other unreasonable compensation it all depends on company fast reactions. Some standards could provide for reference. First, company has to consult both legal advisor and China Labor Authority enquiry personnel to verify the compensation if is valid. Secondly company must not agree or sign any documents to workers or accept their documents to prevent falsely incriminate or embroil (诬赖). Lastly never company head stands out as mediator always give the responsibility to the department head to conciliate and investigate on the root cause, if possible negotiate on the minimum compensation. Always remember compensation once is valid do it fast otherwise it would become snowball effect on your own pocket money! I will discuss “How to control, solve and prevent a workers’ strike?” on my next article.
Copyright protected by Digiprove © 2010 Cyrus Chang
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