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How should the standards for the minimum wage in Shanghai be understood and enforced?
(02.20.2008)

(I) Definition

The minimum wage refers to the lowest labor remuneration that must be paid by enterprises to their employees under the conditions whereby they have provided normal labor within the statutory working hours. The minimum wage can be classified as the minimum monthly wage and the minimum hourly wage; the former shall be applied to full-time employment agreement relationships while the latter shall be applied to non-full-time (part-time) employment agreement relationships.“Normal labor”defined here is different from the labor required to complete a fixed or certain volume of assignments; so long as employees provide labor as their position states in the labor contract, their labor shall be deemed as normal labor.

(II) Relevant Subjects

This refers to any and all enterprises within the territory of the Shanghai Municipality and their employees under certain employment relationships. Other employees shall be covered with a reference to this standard.

(III) The standard for the minimum monthly wage shall be composed of any and all income of a wage nature that shall be listed in the gross payroll according to the instructions given by the State Statistics Authority with specific deduction items as follows:

(1) Social security premiums and public accumulation funds for housing construction payable by individuals according to the law;

(2) wages for the extension of the statutory working hours;

(3) allowances for middle shifts, night shifts, high temperatures, low temperatures, underground operations, toxic/hostile environments, and/or other special working environments or conditions; and

(4) purveyance subsidies (meal subsidies), subsidies for transportation costs in going to and returning from work, and housing subsidies.

(IV) Minimum Wage Standard

The standard for the minimum wage shall be re-adjusted once every two years. In Shanghai, the standard for minimum wage was subject to a re-adjustment effective upon July 1st 2004, to RMB 635.00 per month or RMB 5.50 per hour.

(V) Workplace organizations shall, upon paying the minimum wages, additionally pay their proportion into the social security premiums and public accumulation funds for housing construction payable by employees themselves in accordance with the applied regulations, or, when employing non-full-time (part-time) workers by hourly rates, additionally pay their proportion and the employees’proportion into the social security premiums payable according to the law, if any.