SGS: 15 provinces and cities in China updated their monthly minimum wage standards

SGS: 15 provinces and cities in China updated their monthly minimum wage standards

According to the official data for 2018 from China’s National Bureau of Statistics (NBS) & Ministry of Human Resource and Social Security, 15 provinces and cities have updated their monthly minimum wage standards, to varying degrees.

(PRESS RELEASE) GENEVA, 28-Dec-2018 — /EuropaWire/ — 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 2 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.

According to the official data for 2018 from China’s National Bureau of Statistics (NBS) & Ministry of Human Resource and Social Security, 15 provinces and cities have this year updated their monthly minimum wage standards to varying degrees. Five provinces and cities increased more than CNY 200, they are Guangdong, Hainan, Sichuan, Guangxi and Xizang. In addition, the new minimum wage standard in Chongqing will be formally implemented on January 1, 2019, which provides a standard of CNY 1800 per month for A-Class and CNY 1700 per month for B-Class standard, respective increases of CNY 300 more than the original standard. By December 2018, 6 of 31 provinces and cities in China have a minimum wage standard of more than CNY 2000, they are Shanghai, Beijing, Guangdong, Tianjin, Suzhou, Zhejiang.

2017-2018 Minimum Wage Updates (ranked by wage level)

For detailed information on the different regions, cities and towns, please refer to: SGS China’s Minimum Wage Map [1], or download the App.

For the provinces and cities detailed above, we see that minimum wage increases are highest in Guangxi and lowest in Anhui, the former is 18 percentage points more than latter. The minimum wage in Guangxi increased by 20%, and its A-Class standard has been raised by CNY 280. Regarding this, the Guangxi Office of Human Resource and Social Security expressed that the increase rate is mainly a result of residents’ living expenses, social insurance, average wages of employees and the economic development, etc. The Anhui Office of Human Resource and Social Security expressed that the adjustment in Anhui excludes the social insurance premiums paid by individuals and the housing public accumulation fund from minimum wage. Although the minimum wage was only raised by 30 yuan and the increase rate is 2%, it substantially enhanced the “gold content” of the minimum wage standard.

Whether the minimum wage includes social insurance premium and housing public accumulation fund is not clearly stipulated in relevant laws and regulations, and provinces and cities have different rules. The regulations in Shanghai provides the social insurance premiums paid by individuals and the housing public accumulation fund are not parts of minimum wage standard; the adjusted minimum wage in Jiangxi includes the social insurance premiums paid by individuals; in Yunnan, the minimum wage includes the social insurance premiums paid by individuals and the housing public accumulation fund.

In addition to narrowing the income gap between populations by adjusting the minimum wage standard, up to now, at least 22 provinces and cities have issued the 2018 wage guideline of enterprise to guide enterprises to establish and perfect a normal wage increasing mechanism. According to the target of economic development and control for that year, each province and city government will publish the wage guideline of enterprise as the suggestion on annual wage growth issued to society. The wage guideline is not compulsory or binding, but it can provide a reference for collective wage negotiation between enterprises and employees. For enterprises to reasonably adjust wage growth level, it is also an important means for state-owned enterprises to achieve wage management.

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

Table design: SGS SAS [2]

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