Here’s what you need to know about salary during the pandemic!

Labor Related Questions and Answers during the Pandemic

Should employees who are quarantined during the epidemic or who cannot return to work due to lockdown measures be treated in accordance with the quarantine regulations? What principles should employers follow to pay salaries in different situations?

We’ve prepared some answers to the most frequently asked labor law related questions during the pandemic!

Should employees who are quarantined during the epidemic or who cannot return to work due to lockdown measures be treated in accordance with the quarantine regulations?

No. According to the special circumstances of Shanghai and relevant national and regional policies, we suggest that home-based employees be divided into the following two situations:

a. Quarantine: Those who are legally subject to quarantine measures, such as pneumonia patients infected with Covid-19, suspected patients or people that have been in close contact. For such persons, the employer shall pay the employee for work performed during this period and shall not terminate the employment contract with the employee in accordance with Articles 40 and 41 of the Labor Contract Law;

b. Lockdown: Persons other than those mentioned above who are affected by government emergency measures that prevent the employees from returning to work or the employer from shutting down its production. For this category of personnel, the policy stipulates that both parties to the labor relationship should strengthen the concept of helping each other and overcome the difficulties together, distinguish between different specific situations, and resolve issues such as salaries and benefits by means of negotiation to the fullest extent.

What principles should employers follow to pay salaries in different situations?

a. For employees who provide labor normally through telephone or internet salaries should be fully paid according to labor contract provisions;

b. For employees who cannot provide labor normally, such as those who work partially or on rotation, the employer should not unilaterally reduce the salary without authorization, but can make unified arrangement through democratic negotiation with the staff council, labor union and worker representatives on matters such as salary adjustment and rotation according to the workload, performance and company operation. Please note that the salary adjustment and rotation program should fully comply with the principle of reasonableness and fairness;

c. For the employees who cannot provide labor due to the shutdown of the employer or who cannot return to work due to the epidemic and cannot provide labor in other ways, the employer refers to the relevant regulations during the shutdown period, i.e. within one salary payment cycle, the salaries of the employees are paid according to the standard agreed in the labor contract; beyond one salary payment cycle, the employer can determine the salaries through democratic negotiation between the employer and the staff council, labor union or worker representatives. If no agreement can be reached, the employer shall negotiate with the employees to pay the corresponding living expenses, and the standard of living expenses shall be implemented according to the methods stipulated by each province, autonomous region and municipality directly under the Central Government. The standard of living expenses in Shanghai is not less than the minimum salary.

How are performance pay, subsidies and bonuses paid?

If any item is a fixed monthly payment, which is not related to specific performance, and there is no agreement on any change, it should continue to be paid; if it is required to be assessed and determined according to the specific workload of the employees, and no performance/workload is generated due to quarantine, it can not be paid.

Can employers arrange employees to take leave during the lockdown period?

Employers can arrange for employees to take statutory annual leave or with other leave according to the rules and regulations. For example, employers with a leave adjustment system can arrange employees to take supplementary leave. For employers that arrange employees to use paid annual leave, employer self-imposed welfare leave and other types of leave during the period affected by the epidemic, salaries should be paid in accordance with relevant internal regulations and rules.

Can employees terminate their employment contracts and claim economic compensation on the grounds of non-payment of salaries or payment of social insurance due to the epidemic?

According to the spirit of the Shanghai High Court’s Q&A series on the application of law in cases involving the Covid-19 (V), some employers are affected by the epidemic and fail to pay salaries in full and in a timely manner or fail to pay social insurance in accordance with the law, and the failure to pay salaries or social insurance in accordance with the law is confirmed to be not caused by subjective reasons of the employers. The employee’s claim for payment of economic compensation according to article 38 and 46 of the Labor Contract Law should be handled prudently and generally should not be supported.

However, employers should be reminded that according to “Shanghai latest Working Guidelines on Further Maintaining Harmonious and Stable Current Labor Relations”, it is prudent to advise employers with production difficulties to negotiate and agree with the relevant labor union or worker representatives before deferring payment, and the deferral period should generally not exceed one month.


If you have any labor related queries, please feel free to contact us at Dawo Law Firm.

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