China Minimum Wage Updates in 2020 Donnerstag, 07. Januar 2021 - 01:00

SAFEGUARDS | Labor StandardsNO. 002/21

The legal minimum wage is the lowest amount which employers may pay to employees for work performed within the legal standard working hours, or specific working hours in accordance with their employment contract. According to the new Provisions on Minimum Wage, the minimum wage is one of two types – a monthly minimum wage or an hourly minimum wage. The monthly minimum wage applies to full-time employees, and the hourly minimum wage applies to others such as part-time and temporary employees.

By December 1, 2020, only three provinces (Fujian Province, Qinghai Province and the Guangxi Zhuang Autonomous Region) had increased their minimum wage standards in the last year, and they were all implemented before March 1, 2020. As the table below shows, Fujian adjusted the class of areas from five to four, and the monthly minimum wage for these four classes of area were raised to CNY 1,800, CNY 1,720, CNY 1,570 and CNY 1,420 respectively, with the growth rate of each class between 2.9% to 5.9%. Meanwhile, their hourly minimum wages for part-time employment were adjusted to CNY 18.5, CNY 18, CNY 16.5 and CNY 15 respectively. In Qinghai, only the monthly minimum wage was raised, to CNY 1,700 with an increase of 13.3%, the hourly minimum wage is still CNY 15.2. The monthly minimum wage in Guangxi for three classes was increased to CNY 1810, CNY 1580 and CNY 1430, which were all increased by CNY 130. In addition, the hourly rates were increased too, to CNY 17.5, CNY 15.3 and CNY 14 respectively.

Further information is listed in the following table: (sorted by Class area from highest to lowest):

Remarks: *The monthly minimum wage and hourly minimum wage standards in Fujian Province were adjusted to four levels.
**A, B, C, D mean regional level in each province.

Fifteen provinces and cities raised their minimum wage standards in 2018, and seven in 2019. The minimum wage standard is aimed at not only the protection of workers’ legitimate rights, but also the development of enterprises. Due to the COVID-19 epidemic this year, the business of many enterprises suffered. Therefore, the number of provinces and cities that adjusted their minimum wage standards in 2020 declined drastically compared to the previous two years.

As of 2019, the minimum wage in Shanghai City has been adjusted every year for 10 years. However, Shanghai Municipal Human Resources and Social Security Bureau announced on June 19 that the minimum wage standard in Shanghai would not be adjusted in 2020. The monthly minimum wage standard is maintained at CNY 2,480, the same as 2019. Beijing City, Tianjin City and Shandong Province issued notices on the suspension of the adjustment of their minimum wage standards in 2020. According to the regulation of Ministry of Human Resources and Social Security, the minimum wage standard should be adjusted every two or three years. By December 1, nine provinces and cities had not adjusted the minimum wage standards for over three years, including Tianjin, Shanxi, Inner Mongolia, Jilin, Heilongjiang, Zhejiang, Hubei, Gansu and Ningxia.

The monthly minimum wage standards of A Class regions in six provinces and cities are above CNY 2,000, including Beijing, Shanghai, Guangdong, Tianjin, Jiangsu and Zhejiang. Shanghai ranks first with CNY 2,480, while the monthly minimum wages in A Class region of Anhui is CNY 1,550, ranking last. There is a huge gap of CNY 930 between these two regions, which indicates that the inequality of income distribution in China still needs improvement.

Current minimum wage standards and their effective dates of 31 provinces and cities in China:

Additionally, the Beijing Municipal Human Resources and Social Security Bureau issued the wage guideline for 13 industries on November 23, 2020. The security line of minimum wage for Beijing is stipulated as CNY 26,400, CNY 480 more than 2019. In the face of the severe impact of the COVID-19 epidemic on both enterprises and workers, some provinces and cities not only slowed down the adjustment of the minimum wage standards, but also took some relevant measures, such as extending the period of policy on deduction and exemption of social insurance premiums for enterprises, and expanding the coverage of unemployment insurance. These measures can guarantee workers’ income, as well as relieving the burdens of enterprises, which might help enterprises get through the difficult period.

Data source: Human Resources and Social Security department (bureau) websites of provinces and cities listed in the table
Table design: SGS RBS

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