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- Human Resources and Payroll in China 2016-2017 (5th Edition)
Recuperation Period by Cumulative Number of Working Years
Cumulative Years Worked at
Current Company
Recuperation Period (< 10
Cumulative Years Worked)
Recuperation Period (>10
Cumulative Years Worked)
Under 5 years
3 months
6 months
5 - 10 years
6 months
9 months
10 - 15 years
-
12 months
15 - 20 years
-
18 months
Over 20 years
-
24 months
The employer needs to pay a percentage of the employee’s salary – higher for the first six months
of recuperation and lower for subsequent months. The employee’s salary for calculation of sick pay
is defined as the base salary stated in the employment contract, and does not include additional
social insurance, allowances, bonuses, etc. If there is no clear salary clause in the contract, the base
salary could be determined in accordance with Article 18 of the PRC Labor Contract Law. If the base
salary still cannot be determined or the amount is regarded as unreasonable, 70 percent of the
employee’s normal salary shall be defined as the base salary for calculation of sick pay.
Sick pay cannot be lower than 80 percent of the minimum wage in Shanghai (or 40 percent of
the company’s average salary, up to the point of the employee’s usual salary). Companies are not
required by law to pay more than the Shanghai average salary.
In Shanghai, employers can fire an employee after the recuperation period is over, but will have to
pay the dismissed employee an additional medical care subsidy of no less than six months’ wages
on top of the statutory severance payment. Read more in the Termination Pay section.
Beijing
The recuperation period in Beijing is calculated depending onwhether or not an individual has worked
for 10 years total, and how many years the individual has worked for the same specific company.
The employer is required to pay at least 80 percent of the Beijingminimumwage per month, unless
the contract with the employee says otherwise.
According to the Beijing regulations, the employer may dismiss an employee after the recuperation
period, but the company needs tomake a one-off compensation payment of twomonths’salary for
every year worked (this already includes the regular severance payment). Additionally, the employer
will need to pay six months’ salary as further compensation for medical expenses. This amount is
increased by 50 percent for “serious” illnesses and 100 percent for those defined as “terminal”.