Shanghai raises the Minimum Wage

With the prospective recovery of the Chinese economy upon us, Shanghai Human Resources and Social Security Bureau has declared on 21st March 2018 that Shanghai will raise the minimum wage.

Effective from 1st April on, Shanghai’s monthly minimum wage will be raised from RMB 2300 to RMB 2420, recording a RMB 120 increase; whereas the hourly minimum wage shall rise from RMB 20 to RMB 21. The monthly minimum wage applies where a full-time worker provides standard labor service under the legal working hours of lawfully bound contracts and thus an employer shall pay no less than the minimum wage. As for the hourly wage, it is for the protection of the interests of part-time workers who work for the same employer for no more than 4 hours per day and no more than 24 hours per week.

It’s also worth noting that the minimum wage in this context differs from our normal concept of wage, mainly with respects to the composition of minimum wage, of which the following items are likely to be confusing and shall be excluded from the calculation of minimum wage:

Social insurance and housing funds paid by the individual worker

Overtime pay

Housing allowance

Transportation allowance and food allowance;

Job subsidies for working under toxic and hazardous environments and heating subsidies.

If you are interested in getting more information regarding minimum wage and its impacts on corporate HR arrangements, please write an email to info@dandreapartners.com.