Why Employer Fines are not Fine

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In China, employers do not have the right to impose economic punishments (i.e. fines) on their workers, though they once did, and so this tradition of dead generations weighs like a nightmare on the brains of the living. It most commonly appears in labor contracts and employee handbooks in the evil guise of a deduction of three days wages for each day of work missed.

Fines were fine from 1982 until 2008, that is because during that time a regulation called Regulations on Rewards and Punishments for Enterprise Workers and Staff Members (hereafter Regulations on Rewards; 企业职工奖惩条例, 国发 [1982] 59号) allowed employers to impose economic punishments (11, 16) on their workers. However, this set of regulations was repealed in 2008, as it had been replaced by the labor contract system that is now in place based on the Labor Law and the Labor Contract Law (国务院令第516号, 现公布《国务院关于废止部分行政法规的决定》17). Thus, the legal basis for the employer’s right to impose economic punishments vanished with the repeal of the Regulations on Rewards.

Economic punishments are now only authorized to be implemented under the authority of administrative bodies of government (Administrative Punishments Law 17, 21, 22) and not employers. Employers can withhold wages (and housing allowances are part of total wages [Provisions on composition of total wages 4.4; Interpretation of Several Specific Scopes of the "Provisions on composition of total wages” 1, 3]) in proportion to the amount of contract work not done (usually measured in terms of time for those using the standard or comprehensive working hours systems) but that ratio can only be one to one. If an employer deducts wages at a ratio more favorable to the employer than one to one, for example, deducting three days wages for each day of work missed, then the employer will have failed to meet the obligation to pay remuneration in full and on time (LCL 30) and thus will have given the worker a reason to submit a resignation with rights to economic compensation (severance) under LCL 38.2 and 46.1.

So, no matter where in the division of labor you toil, hunter, fisherwoman, herdsman, critical critic, or even one of those lucky ones who can hunt in the morning, fish in the afternoon, rear cattle in the evening, and criticize after dinner, or even just an English teacher, don’t let your employer steal your hard earned money. And don’t accept contract provisions or employer rules that spuriously grant to the employer powers reserved to the government, because fines aren’t fine when they are imposed by an employer.

References

(1) Regulations on Rewards and Punishments for Enterprise Workers and Staff Members

企业职工奖惩条例, 国发 (1982) 59号

https://www.chashebao.com/shebaotiaoli/19196.html

(2)  Labor Law of the People’s Republic of China 

http://english.www.gov.cn/archive/laws_regulations/2014/08/23/content_281474983042473.htm

中华人民共和国劳动法

http://www.gov.cn/banshi/2005-05/25/content_905.htm

(3) Labor Contract Law of the People’s Republic of China

http://english.www.gov.cn/archive/laws_regulations/2014/08/23/content_281474983042501.htm

中华人民共和国劳动合同法

http://www.gov.cn/flfg/2007-06/29/content_669394.htm

(4) State Council Degree No. 516 (which cancelled Regulations on Rewards among other items)

国务院令第516号, 现公布《国务院关于废止部分行政法规的决定》

http://www.gov.cn/gongbao/content/2008/content_946045.htm

(5) Administrative Punishments Law of the People’s Republic of China

https://www.chinalawtranslate.com/en/administrative-punishment-law-2021/

中华人民共和国行政处罚法

http://www.npc.gov.cn/npc/c30834/202101/49b50d96743946bda545ef0c333830b4.shtml 

(6) Provisions on composition of total wages

关于工资总额组成的规定

http://www.stats.gov.cn/zjtj/tjfg/xzfg/200207/t20020702_36026.html

(7) Interpretation of Several Specific Scopes of the "Provisions on composition of total wages”

国家统计局《关于工资总额组成的规定》若干具体范围的解释

http://www.chinaacc.com/new/63/74/1990/1/ad5578334011111099123994.htm

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