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Medical Masks & the Law

March 4, 2020

Since the outbreak of NCP, medical masks have become a must-have for all people. For example, the office of the Prevention and Control Command of NCP in Guangdong, issued a notice as early as 26 January 2020, requiring everyone to wear a mask in public places (please check our previous post for more details: CNY Holiday Extension & Updates on Curbing Virus Outbreak.)

Of course, the masks to be donned are not ordinary masks. There are strict product quality standards and requirements for companies to manufacture or sell them. Let’s take a closer look at these rules:

1. Quality requirements for medical masks

Medical masks are different from ordinary masks. Generally speaking, according to their product standards, such as non-oil particle filtration efficiency, air flow resistance, filtration efficiency, bacterial filtration efficiency and respiratory resistance etc., medical masks can be divided into three types:

a) medical protective masks;

b) medical surgical masks; and

c) general medical masks.

Different product standards will be applied respectively, which are “Medical Protective Mask Technical Requirements” (GB19083), “Medical Surgical Mask Technical Requirements” (YY0469) and “One-time Use of Medical Masks ” (YY/T0969).

The third type masks, “general medical masks” refer to all medical masks, the name of which does not contain “protection” or “surgical”. This type of masks is only used in medical environments.

In addition, the product manual should clarify whether to implement the above mentioned three product standards, the scope of application of the product must be consistent with the product standards applied. Filter level, storage period, whether it is for one-time use should also be clarified on the packaging.

medical masks can be divided into three types: medical protective masks,
medical surgical masks and general medical masks.

2. Company requirements to produce or sell medical masks

At present, according to the revised “Medical Device Classification Catalog” issued by the former State Administration of Food and Drug Administration (now merged into the State Administration for Market Regulation) on 31 August 2017, medical masks fall under the second category of medical devices. In accordance with the “Regulations on the Supervision and Administration of Medical” Devices (2017 Amendment), companies engaged in the operation of producing or dealing with medical masks shall file a record with the food and drug supervision and administration department of the local government, otherwise they shall not engage in such business activities.

3. Legal responsibility of producing or selling counterfeit and inferior medical masks

According to China’s relevant laws, the act of manufacture or sale of counterfeit medical masks that cannot provide effective protection is illegal and even constitutes a criminal offense.
Article 49 of the “Product Quality Law of the People’s Republic of China” stipulates:

“If the products of a producer or seller do not comply with the national or industry standards for protection of health or personal safety or the safety of property, orders shall be issued to cease their production or sale. Products that have been illegally produced or sold shall be confiscated. A fine shall be imposed equal to an amount greater than the value of the products that have been illegally produced or sold (hereafter including products already sold and goods not yet sold) but less than three (3) times the value of the products; where there is illegal income, the illegal income shall be confiscated; where the circumstances are serious, the business license shall be revoked; where the case constitutes a crime, criminal liability shall be pursued in accordance with law.”

In addition, the manufacture and sale of counterfeit and inferior medical masks also violates the provisions of Article 145 of the “Criminal Law of the People’s Republic of China”:

“Whoever produces medical appliances or medical hygiene materials that do not conform to the national or trade standards safeguarding human health, or sells such appliances or materials while clearly knowing their inconformity to the national or trade standards safeguarding human health, and thereby causes serious harm to human health, shall be sentenced to fixed-term imprisonment of not more than five years, and concurrently be sentenced to a fine of not less than half of the sum obtained through sale and not more than twice of the sum. If the consequences are especially serious, the offender shall be sentenced to fixed-term imprisonment of not less than five years and not more than ten years, and concurrently be sentenced to a fine of not less than half of the sum obtained through sale and not more than twice of the sum; the offender whose circumstances are especially flagrant shall be sentenced to fixed-term imprisonment of not less than ten years or life imprisonment, and concurrently be sentenced to a fine of not less than half of the sum obtained through sale and not more than twice of the sum or confiscation of property.”

Lastly, according to the guidance issued by the Supreme People’s Procurator on the “Handling of Criminal Cases during the Prevention and Control of NCP” issued on 30 January 2020, criminal acts that endanger the prevention and control of the epidemic and seriously disturb the social order will be dealt with strictly in accordance with the law.

Medical masks, Medical masks & Chinese law, Medical masks & NCP

Regulation on Foreign Permanent Residence Released for Comment

March 1, 2020

On 27 February 2020, the Ministry of Justice has released its draft of the “Regulation of the People’s Republic of China on Foreign Permanent Residence” for public comment.

According to this draft, there are four types of foreigners that could apply for permanent residence (“China’s green card”, please check our previous post for further information: Chinese Green Card, Are You Qualified?):

investment;
application due to employment;
tending to relatives, and
special contributions.

For sake of brevity this post will concentrate on investment, employment and family grounds. For further information regarding “special contributions” please consult the links as listed per below.

1.) Investment.

If foreigners undertake steady investments for three years and can provide sound tax and credit records, they are eligible to apply for permanent residence under the following circumstances:

(a) They have undertaken at least 10 million yuan of investments in China;

(b) They have made investments in areas encouraged by China, and meet certain conditions with regards to the investment value, tax payments and hiring of Chinese employees;

2.) Employment.

Foreigners who work in China, may be eligible for permanent residence if they fulfill one of the following requirements and have a good tax and credit history:

(a) Holding a doctoral degree or graduating from an internationally renowned university and have worked in China for three years, during which time the cumulatively actual residence time in China is not less than one year;

(b) Having worked in key industries or fields where the nation has been developing for three years, during which time the cumulatively actual residence time is not less than one year, and the annual wage income is not less than four times of the local average wage in the previous year;

(c) Having worked continuously in China for four years, during which time the cumulatively actual residence time is not less than two years, and the annual salary not less than six times of the local average wage in the previous year;

(d) Having worked continuously in China for eight years, during which time the accumulatively actual residence time is not less than four years, and the annual salary not less than three times of the local average wage in the previous year.

four types of foreigners can apply for permanent residence (green card) in China: investment; employment; family reunion, and special contributions

3.) Family reunion.

Foreigners who want to apply for permanent residence based on “family reunion” or “tending to relatives” grounds should meet one of the following criteria:

(a) The spouse is a Chinese citizen residing in China or a permanent resident foreigner, who has been living with his/her spouse in China continuously for five years after marriage and has stayed in China cumulatively no less than nine months each year, and has a stable income and residence;

(b) Children under the age of 18 are dependent on Chinese parents residing in China or foreign parents who have permanently resided in China;

(c) Foreigners older than 60 years and have no immediate family members living abroad, who are dependent on a Chinese immediate family member residing in China or who have permanently resided in China, and who have been in China continuously for five years and have stayed in China cumulatively no less than nine months each year, and have a stable income and residence.

If you have any comments, you can provide your comments through the “Information Solicitation System” on the homepage of the website of the Ministry of Justice of the People’s Republic of China or www.chinalaw.gov.cn or through the “Information Solicitation System” on the homepage of the website of Legal Services of China before 27 March 2020.

Or send an email to: YJJL2020@chinalaw.gov.cn

China green card, Chinese green card, family reunion, permanent residence in China

Can I Terminate My Contract due to the NCP outbreak?

February 27, 2020

The following cruise ship dispute occurred at the height of the previous SARS outbreak. In today’s post we will be sharing with our readers the judgement （Case No: (2007) Er civil Four Final No. 47）and the reasoning behind it. As a result we hope you might be on sound footing and know how Chinese judges may legally approach the issue of “force majeure”.

Dongjiang Company (the complainant, hereinafter “Dongjiang”) and Changjiang Overseas Company (the defendant, hereinafter “Changjiang”) signed a cruise ship lease contract on August 10, 2001 (hereinafter the “lease contract”) for the duration of six-years. Changjiang leased five cruise ships to Dongjiang to operate them for tourism purposes on the Yangtze River. During the performance of the lease contract, SARS broke out in China. As a consequence, the National Tourism Administration issued a travel ban in April 2003. On 3 April 2003, Dongjiang sent a letter to Changjiang asking to stop performance of the lease contract in April, but Changjiang didn’t agree. Therefore, on 5 April 2003, Dongjiang formally informed Changjiang that they terminated the lease contract. All five cruise ships ceased operations on 13 April 2003.

Later on the dispute was brought to the local court culminating in the question whether Dongjiang can terminate the lease contract, or whether Dongjiang is obliged to continue to pay a leasing fee and in addition damages for breach of contract.

On 16 December 2008, the High Court of Hubei Province (hereinafter the “Appellate court”) rendered its final award. According to the award, the Appellate court summarized the merits of the dispute and provided the parties with its reasoning accordingly:

(1) Legal characterization of SARS outbreak.

The Appellate court held that the judgment whether the SARS outbreak constitutes an event of force majeure can only be made under certain conditions in light of time and space, i.e. whether such an event is unforeseeable, unavoidable and is not able to be overcome (please check our previous post: Force Majeure? – To be, or not to be, that is the question!), all judgement has to be made according to the scientific and technological level at that time. Based on the level of science and technology during the epidemic period, if the “SARS” outbreak is considered as an event of force majeure, then it is. The characterization of SARS would not change just because the outbreak disappeared or was subsequently controlled. As to whether the lease contract can be terminated due to the event of force majeure, is another matter. It is irrelevant to whether the outbreak of SARS is an event of force majeure.

(2) Whether Dongjiang is entitled to terminate the lease contract in accordance with its provisions?

NCP outbreak had big impact on the performance of the lease contract, yet not to such an extent that the purpose of the contract could not be achieved

The lease contract has specified that:

1. The party shall give six months written notice if it intendeds to terminate the contract.

2. The party shall reimburse the other party for their losses.

Then the contract may be terminated through negotiation on the premise that the first two conditions are met.

However, Dongjiang failed to meet the above-mentioned requirements.

(3) Whether Dongjiang can unilaterally terminate the contract on the grounds of statutory termination?

Dongjiang claimed that they are entitled to a statutory termination and the Appellate court reasoned as follows:

a) Dongjiang holds that: Since Article 94 (1) of the Contract Law of the People’s Republic of China gives the parties the right to terminate the contract unilaterally as a result of an event of force majeure, as long as there exists such event, it of course has the right to terminate the contract unilaterally.

The Appellate court held that, despite the aforementioned provision, the provision also specified that, the parties may unilaterally terminate the contract only when the event of force majeure affected the realization of the purpose of the contract. Otherwise, the parties to the contract are not entitled to any legal termination.

b) Dongjiang believes that: because of the “SARS” outbreak, the purpose of the lease contract cannot be achieved anymore and was hence terminated by Dongjiang via written notice.

The Appellate court held that, the time when performance of the contract was affected by the SARS outbreak can start as early as 13 April 2003 (earlier than the time the Government issued a travel ban, i.e. 28 April 2003), and ended on 1 August 2003, when Dongjiang gradually resumed its operations (actually, this time is later than the time when the World Health Organization announced lifting the travel warning for Beijing, which was, 24 June 2003). The time for suspension of operations during the “SARS” outbreak was 109 days, this amounted to merely 10 per cent compared to the remaining 1,078 operating days of the five cruise ships involved. Therefore, the Appellate court held that, the SARS outbreak had a great impact on the performance of the lease contract, however this impact had not yet reached such an extent that the purpose of the contract could not be achieved anymore. Therefore, the court did not support Dongjiang’s practice of terminating the contract unilaterally and its unilateral termination constituted a breach of contract.

(4) Whether the leasing fee should be reduced, if yes, how?

During the outbreak of SARS, Dongjiang is unable to perform the contract in accordance with the terms originally agreed upon, it has the right to suspend the lease contract, or ask Changjiang to reduce the leasing fee at its discretion. The legal basis of such a claim is Article 117 (1) of the Contract Law of the People’s Republic of China: “If the contract cannot be performed due to force majeure, it shall be partially or completely exempted from liability according to the influence of force majeure”. As mentioned earlier, Dongjiang’s full obligations under the lease contract has been affected by the SARS outbreak, Dongjiang has the right to claim partial exemption from its liability of non-performance. That is, the number of days that have been suspended due to the outbreak shall be deducted from the number of days to pay a leasing fee.

In summary, the Appellate court held that, the “SARS” outbreak constituted an event of force majeure, which has had an impact on the performance of the lease contract involved, and Dongjiang has the right not to pay the rent during the time when performance of the contract was impacted by the “SARS” outbreak. However, there was no such stipulation that any party can unilaterally terminate the contract due to the event of force majeure. At the same time, the “SARS” outbreak’s impact on the contract has not yet reached the extent that the purpose of the contract cannot be achieved anymore, therefore, according to the contractual stipulations or the provisions of the law, Dongjiang has no right to unilaterally terminate the lease contract. Dongjiang’s unilateral termination of the contract, and its act of refusing to pay the leasing fee constituted a breach of contract, so it should pay damages for breach of contract.

Useful link:

The Supreme People’s Court of The People’s Republic of China

NCP outbreack, terminate contract because of NCP outbreack

Force Majeure? – To be, or not to be, that is the question!

February 24, 2020

Since the outbreak of the new coronary pneumonia, mainland China has initiated a public health emergency. Local governments generally required companies not to resume work earlier than 9 February 2020, of which Hubei Province even required companies not to resume work earlier than 13 February 2020.

It is not difficult to imagine that the outbreak of NCP (including relevant measures taken by the government, collectively referred to as the outbreak of “NCP”)), seriously affected the performance of many civil and commercial contracts.

1. The urgent question therefore is the following:

Does the outbreak of NCP and related prevention and control measures constitute an event of “force majeure”?

On 31 January 2020, the World Health Organization declared the outbreak of NCP a “public health emergency of international concern” (“PHEIC“). In accordance with the provisions of the International Health Regulations, “public health emergency of international concern” means an unusual event that constitutes a public health hazard to other countries through the international spread of a disease and may require a coordinated international response.

On 20 January 2020, the National Health Commission of the PRC classified NCP a class B infectious diseases as stipulated in the “Law of the People’s Republic of China on the Prevention and Control of Infectious Diseases”, and adopted prevention and control measures akin to a Class A infectious diseases, please check our previous post: China Classifies Coronavirus as Category B Infectious Disease for details. This is similar to the situation in 2003 when “SARS” broke out. Which means, although NCP and SARS are class B infectious diseases, prevention and control measures are implemented and adopted in accordance with the elevated standards of a Class A infectious disease.

To answer our question, let’s have a look at the definition of force majeure in Chinese law. According to Article 180 of the General Principles of Civil Law: “Force majeure refers to an objective situation that is unforeseeable, unavoidable and is not able to be overcome.”

many disputes occur in the existence of a causal relationship between the force majeure event--outbreak of NCP and the failure of contractual performance.

We believe that, in view of the similarity between the outbreak of NCP and the 2003 outbreak of SARS, we may refer to the opinion of the Supreme People’s Court for the characterization of the SARS outbreak to determine the nature of NCP and the legal relevance related to contractual disputes caused by the outbreak. To this end, a lot can be learned from the “Notice of the Supreme People’s Court on the Conduct of the Relevant Trials and Execution of the People’s Court in accordance with the Law during the outbreak of SARS” [Law No. 72(2003)] (“Notice“). In this Notice, the Supreme Court has made it very clear that if the contract cannot be performed or the parties to the contract cannot perform the contract at all due to the SARS outbreak, it may be regarded as “force majeure”.

2. Not all defaults are exempt from performance liability?

However, although the outbreak of NCP can be characterized as an event of “force majeure”, whether it will be recognized as force majeure in a specific contractual dispute and thus constitutes a statutory exemption from liability for breach of contract, still needs to be determined in combination with the fundamental purpose of each individual contract and its performance obligation in light of other factors. As a matter of fact, many disputes occur in the existence of a causal relationship between the force majeure event and the failure of contractual performance.

In addition, in accordance with the provisions of the Contract Law of the People’s Republic of China, the party experiencing a force majeure event is liable for timely notice to the other party, reducing or controlling losses and providing proof within a reasonable period of time. In the event that a party fails to mitigate the losses that may have been inflicted upon the other party in a timely manner, they shall still be liable for so-called “extended” losses. Furthermore, if force majeure occurs after the party already delayed performance (!), liability for breach of contract cannot be exempted.

In our next post, we’ll study selected cases to make sure our audience is familiar with China’s judicial perspective on “force majeure” and similar cases.

Related provisions in Contract Law of the PRC:

Article 117. Where it is not possible to perform a contract due to force majeure, then, depending on the extent of the force majeure, the performing party shall be partially or wholly excused from liability, except where laws provide otherwise. Where force majeure occurs after a party has already been late in performing an obligation, the said party will not be excused from liability.

In this Law, “force majeure” means a situation which, on an objective view, is unforeseeable, unavoidable and is not able to be overcome.

Article 118. Where one of the parties is unable to perform the contract due to force majeure, the said party shall immediately notify the other party in order to reduce the potential losses sustained by the other party, and the said party shall also provide evidence of the force majeure within a reasonable time.

Useful link:

The Supreme People’s Court of The People’s Republic of China

NCP outbreak, provision about force majeure in China

Policy Support to Business During NCP Outbreak

February 20, 2020

On 18 February 2020, the executive meeting of the State Council was held in Beijing. The meeting decided to take additional measures to stabilize the economy and labor market by provisionally reducing a company’s contributions for social insurance and defer payments for the housing provident fund etc.

The meeting stressed that, at present, one urgent task is to stabilize the labor market as a stable labor market results in stable businesses. The meeting determined to:

1. Periodically reduce or exempt companies from contributions for pensions, unemployment and work-related injuries, in order to reduce the impact of the epidemic on companies, especially SME’s, and allow them some respite following the resumption of their operations. In provinces other than Hubei, SME’s can be exempted from the above mentioned three contributions from February to June this year, and large companies can be levied in half from February to April. All companies in Hubei Province will be eligible for a waiver of contributions from February to June this year.

China governemnt is stabilizing the economy and labor market by reducing company’s social insurance contributions and defer housing provident fund payment

2. At the same time, before the end of June, companies may also apply to defer their payments to the housing provident fund. Failure by employees to repay their housing provident fund loans due to the epidemic will not be treated as a default.

In addition, according to the State Council’s press conference on joint defense and control mechanism on 19 February 2020, the Ministry of Human Resource & Social Insurance and the Ministry of Finance together introduced new measures to increase the support for SME’s. In the event that the redundancy rate of SME’s is not higher than the previous year’s control target of the unemployment rate benchmarked to the national urban survey, which is 5.5%, or lay-offs are not more than 20% for companies with less than 30 employees, such companies may claim refund of social insurance contributions as stabilization support ( Please check our previous post: Stabilizing labor relations in challenging times) .This would amount to 50% of the yearly unemployment insurance contributions such companies made in 2019.

Useful link:

Ministry of Human Resources and Social Security of the People’s Republic of China

China business during NCP out break, policy support to Chinese SMEs,

What Can We Learn from the Business License?

February 17, 2020

When a child is born, a birth certificate will be issued. When a company is incorporated, a business license will be granted. So, a business license is similar to a certificate of identification for a company, just like a birth certificate to a person. The day the business license is issued, is the day the company is officially incorporated. The company can proceed with other formalities, such as opening a bank account, tax registration, filing with the Ministry of Commerce, to have company seals made etc.

For those who deal with the company, the business license is equally important. Because they can glean from the business license all important information about a company. Let’s see what we can learn from the business license:

1. Unified Social Credit Code

The Unified Social Credit Code of a company is just like the ID number for any individual. Which is unique for each company and will be associated with a particular company from its incorporation till its official deregistration. It’s a set of codes consisting of 18 letters or numbers. It’s the same as the Taxpayer Identification Number (Tax No. for short). However, the purpose is totally different. The Tax No. is mainly for a company’s tax obligations, however the Unified Social Credit Code is an identity code for a company.

a business license is similar to a certificate of identification for a company, just like a birth certificate to a person.

2. Company name

Many companies in China, have an English name, especially for export-oriented companies, which you can find on their business cards, their websites, their booths in trade exhibitions or E-commerce platforms. You can even locate them on the internet and social media via their English name. But do you think you could locate them in the same way as you do in the virtual world? If so, then you are wrong. One important thing you have to keep in mind when doing business in China is that, all official documents from the Government are issued in Chinese, and all documents you submit to Government need to be in Chinese, too. The business license is no exception, including all company information，except the name of the legal representative, which could be in English, if he or she is a foreigner.

So just remember, the only official name for a Chinese company will be the name in Chinese shown on its business license. A simple but important fact. It’s ok if you can’t read Chinese, but if you don’t know a company’s Chinese name, you can’t really claim to know this company.

3. Type of the company

Generally speaking, there are two types of business entities, one is the corporation, another one is the partnership. Since 1 January 2020, there are no more “WFOE” or “JV”. Now, all business entities with invested capital from foreigners are differentiated into corporations or partnerships, and enjoy the same treatment that is enjoyed by Chinese citizens, as long as their business does not fall under the scope of the negative list for investments.

4. Legal representative

For further information on the legal representative, please check our more detailed post: What is a Legal Representative?

5. Scope of business

The business scope refers to the operation and service that a company can engage in. The different type of operation is related to the different type of Fapiao a company is entitled to issue. Also, please bear in mind, for some operations, such as training, education and catering services etc., the entity has to apply for an extra administrative permission to be legally allowed to engage in such operations.

6.QR code

People can scan this QR code to login to the National Entity Credit Information Publicity system to know more about a certain company, such as its date of registration, filings, authorizations and supervision etc.

7. Registered Capital

For further information on registered capital, please check our more detailed post: What Does Registered Capital Mean? More about Registered Capital.

8. Date of incorporation

As said before, the date of incorporation of a company is the day its business license is granted.

9. Term

The existing term of the company, usually it’s indefinitely.

10. Address

The address here means the address for the headquarter in China or main office of the company.

All this information has to be consistent with the company as a “going concern” and need to reflect the actual situation of the company. If any change occurs, the company has to file the change with the Administration of Industry and Commerce, and an updated business license will be issued accordingly.

Useful link:

MINISTRY OF COMMERCE OF THE PEOPLE’S REPUBLIC OF CHINA

business license, Due diligence on China company, identity of China corporation

Payment During NCP-Suggestions from Professional

February 13, 2020

Since the Spring Festival, the central and local administrative departments at all levels, have issued a number of measures such as extended holidays, delayed resumption of work etc. to deal with the NCP outbreak, pls check our post: Stabilizing labor relations in challenging times, CNY Holiday Extension & Updates on Curbing Virus Outbreak , Notice on Tackle Coronavirus Effect on Employment, have led to concerns and intensive discussions regarding a proper implementation of these rules and policies. Hence, the Labor and Social Security Law Professional Committee of the National Bar has put forward suggestions and reasoning regarding some of those aforementioned issues. We have translated the main points as follows:

I. Nature and corresponding treatment of employees during extended Spring Festival Holidays

The purpose of the extended Spring Festival holiday (31 January till 2 February) is actually a measure to reduce large gatherings of people to control the outbreak. For clarification purposes, they recommend that the extended Spring Festival holiday is treated as a day of rest instead of statutory leave. Which means, that companies may arrange a make-up break for employees who have worked during these three days, otherwise, not less than 200% of the normal wages have to be paid.

II. Nature and corresponding treatment of employees during the delayed resumption of work (except in Hubei)

According to the suggestion, in China, more than 80% of employees work in SME’s. However, many SME’s may not be able to start normal operations just because the epidemic cannot be controlled within such a short time. Except there is no respite from revenue or capital demands, these companies also have to deal with rental payments, outstanding loans, labor expenses and other costs of doing business which could lead to existential problems. In the end, it is likely that jobs might be drastically reduced, which in consequence will affect the entire economy.

The experts further pointed out, that the purpose of a delayed resumption of work is an expedient way to control the outbreak of NCP instead of increasing employee’s rest or vacation. It cannot be simply concluded that this delayed period is equivalent to a leave, nor can it be concluded that the work during the delayed period is overtime, otherwise it will deviate from the original intent of the law–to maintain normal productional and operational order.

the purpose of a delayed resumption of work is an expedient way to control the outbreak of NCP instead of increasing employee’s rest or vacation

As a consequence, they recommended:

1. The delayed period should be clearly characterized as a stoppage period instead of a holiday or an additional day off.

2. For employees who needed to resume work in advance or worked from home during the delayed period, their regular salary shall be paid. Their provision of labor shall be treated as regular work instead of overtime.

3. Work from home and other flexible working methods are recommended. If work from home can’t be arranged, the company may try to arrange paid annual leave, welfare leave provided by company, or resort first to rest and then make up shifts etc. Furthermore, a comprehensive transfer of paid annual leave, enterprise-owned welfare leave and rest days, the implementation of first leave or rest and then make up shifts, shall be considered.

4. Those who fail to provide regular work during the delayed resumption of work, shall be dealt with in accordance with the provisions of the Notice released by the Ministry of Human Resources and Social Security of PRC on 24 January 2020, which means the company will provide living expense according to the respective local level.

III. What if companies use annual leave to offset the time that employees have not provided work during the period of delayed resumption of work?

The experts suggest that the company can do the offset directly.

Useful link:

Ministry of Human Resources and Social Security of the People’s Republic of China

NCP outbreak, payment during extended Spring Festival Holidy, payment during NCP outbreak

Quid Pro Quo?—Payment During NCP

February 11, 2020

This old Latin phrase is used by lawyers to explain that an exchange of goods and services for payment is usually contingent upon the other or “I owe you and you owe me”. In our daily language this legal principle is reflected in phrases such as “an eye for an eye” or “you scratch my back, and I’ll scratch yours”, and last but not least “one hand washes the other”. The latter one cannot be stressed more than enough in this testing Coronavirus times. Pardon the pun.

However, this should lead us to our legal questions of today such as whether an employee will be paid if he or she won’t be able to go to work due to the epidemic? How to calculate overtime pay during the extended Spring Festival holiday? What if a labor dispute arose during this time?

We already published two articles regarding the central government’s policy about such issues: Stabilizing labor relations in challenging times, CNY Holiday Extension & Updates on Curbing Virus Outbreak, However, how to interpret those new policies remains a challenge. On 8 February 2020, the Ministry of Human Resources and Social Security of Jiangsu Province elaborated upon the application of relevant laws and policies. We believe that their explanation is rather comprehensive and reasonable in accordance with relevant provisions. We therefore prepared the English version accordingly and share it as follows:

1. Question (Q): Do employers have to pay wages to employees who are pneumonia patients, suspected patients, close contacts during their isolated treatment or during medical observation, and for employees (including labor dispatchers) who are unable to provide regular work as a result of the government’s quarantine measures or other emergency measures?

Answer (A): A company shall treat the employees who are pneumonia patients, suspected patients, close contacts during their isolated treatment or during medical as they have provided regular work and shall therefore pay the employees’ agreed remuneration for that period. After the end of the quarantine measures or other emergency measures implemented by the government, the company shall pay the employee who needs to stop working due to treatment in accordance with the relevant provisions about medical treatment.

2. Q: How to calculate the extended Spring Festival holiday overtime pay?

A: During the extended holiday holidays (31 January, 1 February and 2 February), the company shall arrange for employees to work in accordance with the provisions of the Labor Law of the People’s Republic of China. If a make-up leave cannot be arranged, the remuneration shall be paid at a rate not less than 200% of the employee’s daily or hourly salary.

3: How should a company pay wages of employees during the suspension of work ?

A: Company shall pay employees in accordance with the relevant provisions on wage payment during the period of stoppage and shutdown, when it delays the resumption of work in accordance with the requirements of the provincial government. I.e., the company shall pay wages of employees in accordance with the standards stipulated in the labor contract during the period of suspension and shutdown within one wage payment cycle. In case of more than one wage payment cycle, the company shall pay living expenses amounting to not less than 80% of the local minimum wage. However, if a company negotiates with its employees to use such holidays as paid annual leave first, wages shall be paid in accordance with the provisions of the relevant leave; if the company requires the employees to work from home, the wages shall be paid in accordance with the law.

4. Q: If employees are unable to return to work on time after 9 February, how will the company pay wages?

A: If employees are unable to return to work on time after 9 February, relevant regulations on wage payment during the period of stoppage and shutdown shall be implemented (as explained above (kindly refer to A 3)

As a result of the prevention and control of the epidemic, if the company requires the employees to postpone their return to work after 9 February, the company may, in consultation with their employees, use such holiday as paid annual leave first and pay wages in accordance with the provisions of the relevant leave, or pay living expenses to the employees during their suspension of work in accordance with the relevant provisions.

5 Q: Can a company terminate the labor contract with its employees, if they are Novel Coronavirus Pneumonia (NCP) patients, suspected patients, close contacts during their isolation treatment or during medical observation, or unable to provide regular work because the government implemented isolation measures or other emergency measures?

A: A company may not terminate a labor contract with these employees. During this period, the expiration of the labor contract shall be extended to the expiration of the medical period, the expiration of the medical observation period, the expiration of the period of isolation or the end of the emergency measures taken by the government.

Companies that have encountered difficulties in production and operation, are encouraged to negotiate with their employees by means of democratic procedures to adjust salaries, shifts or job rotations, shorten working hours and resort to other means to stabilize employment and reduce layoffs.

6. Q: During the epidemic prevention and control period, how should employees defend their rights when encountering employment disputes?

A: Employees can log on to the website of Jiangsu Human Resources and Social Security in the event of a labor dispute, or call 12333 to select a mediation specialist. If a party affected by the outbreak cannot apply for arbitration in labor disputes before the statutory deadline, which is within one year since the dispute occurs, the time limit for arbitration shall be suspended. The time limit for arbitration shall continue to be calculated from the date of the elimination of the reason for the suspension.

7. Q: Does it amount to a work-related injury if medical staff get infected by the NCP due to the epidemic prevention work they are providing? How should they apply for it?

A: A person who gets infected with the NCP due to the performance of his or her duties may be regarded as a work-related injury. The departments of HR & SI at all levels shall complete the job of identifying work-related injuries within 3 days after accepting applications.

NCP outbreak, payment during NCP outbreak, resumption of work, shutdown

1. Quality requirements for medical masks

2. Company requirements to produce or sell medical masks

3. Legal responsibility of producing or selling counterfeit and inferior medical masks

1.) Investment.

2.) Employment.

3.) Family reunion.

(1) Legal characterization of SARS outbreak.

(2) Whether Dongjiang is entitled to terminate the lease contract in accordance with its provisions?

(3) Whether Dongjiang can unilaterally terminate the contract on the grounds of statutory termination?

(4) Whether the leasing fee should be reduced, if yes, how?

1. The urgent question therefore is the following:

2. Not all defaults are exempt from performance liability?

1. Unified Social Credit Code

2. Company name

3. Type of the company

4. Legal representative

5. Scope of business

6.QR code

7. Registered Capital

8. Date of incorporation

9. Term

10. Address

I. Nature and corresponding treatment of employees during extended Spring Festival Holidays

II. Nature and corresponding treatment of employees during the delayed resumption of work (except in Hubei)

III. What if companies use annual leave to offset the time that employees have not provided work during the period of delayed resumption of work?

2. Q: How to calculate the extended Spring Festival holiday overtime pay?

3: How should a company pay wages of employees during the suspension of work ?

4. Q: If employees are unable to return to work on time after 9 February, how will the company pay wages?

6. Q: During the epidemic prevention and control period, how should employees defend their rights when encountering employment disputes?

7. Q: Does it amount to a work-related injury if medical staff get infected by the NCP due to the epidemic prevention work they are providing? How should they apply for it?

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