Answer: Package wage system refers to the wage system where employees¡¯ monthly wages, agreed upon by the employers and employees, include a certain number of overtime hours as part of the packaged pay. Instead of providing additional overtime pay after employees did overtime work within the agreed number of overtime hours, the employers pay a fixed agreed wage package. Therefore, the package wages is a “package” wage that includes normal and overtime wages, and is normally applied to employee with fixed overtime arrangement.
To compute normal work hour wage included in a package wages in a particular month, it is necessary to reverse the calculation method of overtime wage. For example, Ms. Li’s contract stipulates a monthly package wage of RMB 5,000, including 10 hours of overtime in weekdays and 4 hours of overtime in weekends. Let’s assume that her normal hourly rate is H. The calculation equation is: H * 21.75 * 8 + H * 10 * 150% + H * 4 * 200% = 5,000. Her normal hourly wage is RMB 25.38, and thus her normal work hour wage is RMB 4,416 in the month.
Having obtained Ms. Li’s normal hourly rate, we can further calculate overtime wages if she worked more overtime hours than provided in the contract. For example, in another specific month, she worked 15 hours of weekdays overtime and 8 hours of weekend days overtime in addition to her normal work hours in this month, meaning that she had additional 5 hours of weekdays overtime and 4 hours of weekend days overtime out of her original package. Therefore, her wage payable this month is RMB 5,393.4 (5,000 + (15-10) * 25.38 * 150% + (8-4) * 25.38 * 200%).
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Mr. Dong Wang has been in practice for over 20 years, specializing in business law, including employment law, commercial law, company law, and intellectual property law. Mr. Wang has earned respect and trust from his clients due to his professionalism, fidielty, and kindness.
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