Answer: As explained in ¡°How do I calculate the wages of employees under the piecework wage system?¡±, employees¡¯ wages under a piecework wage system are determined by piecework quota and piecework unit price, normally dictated by employers. The reasonableness of the two, therefore, is vital.
If piecework quota and piecework unit price are applied in computing an employee¡¯s wage, there are two main considerable factors to determine whether piecework quota and piecework unit price are reasonable from the current judicial practice and regional regulations:
The first is the minimum wage bottom line factor, i.e., an employee¡¯s average hourly wages under a piecework system musts not be lower than the local minimum wage standard, having taken into account of the employee¡¯s working hours in workdays, weekend days, and public holidays. This is the minimum wage protection for piecework employees under employment law. For example, Mr. Zhang¡¯s piecework quota is 1,000 and the piecework unit price is RMB 2. In a particular month, he completed 1,100 units in normal work hours (standard 174 hours per month in China), 200 units in 40 hours of weekdays overtime, and 50 units in 10 hours of weekend days overtime; and his wages is RMB 2,900 under the piecework wage system. Mr. Zhang’s average hourly wage under the standard workhour system is RMB 11.4 (2,900 / (174 + 40 * 150% + 10 * 200%)). If the local minimum hourly wage is RMB 22, Mr. Zhang’s wage obviously falls under the minimum wage standard. Therefore, the piecework quota and piecework unit price are not reasonable. Mr. Zhang’s wages must be adjusted to RMB 5,588 (22 * (174 + 40 * 200% + 10 * 200%)) based on the minimum hourly wage.
The second factor is industrial practice. Reasonableness also requires a piecework quota conforming the industry standard or a fair level in the industry in terms of productivity of individual employee. Courts may invalidate overly high piecework quotas. However, as to who (the employer or the employee) is responsible for proving the reasonableness or unreasonableness of the piecework quota, courts around the country adopt different practices at present. In the case of Shen Xulan in 2015, the Shenzhen Intermediate Court held that the employer should be responsible for proving the rationality of the piecework quota.1Xue Chengsong, Wenzhou Shenshi Stationery Co., Ltd. Civil Judgment of the Second Instance of Labor Dispute Civil Judgment of Wenzhou Intermediate People’s Court of Zhejiang Province (2020) No.5193. ¡°The employer implements the piecework wage system for workers, and if the workers claim overtime wages, they shall mainly examine whether the piecework wage piecework quota is reasonable. However, Xue Chengsong did not prove that he and Shenshi Company had agreed on the piecework wage quota or that there was an industry standard that could be referred to.¡±Labor dispute between Shen Xulan and Shenzhen Weimei Children’s Products Co., Ltd., Shenzhen Intermediate People’s Court of Guangdong Province issued a civil judgment (2015) Shen Zhong Fa Lao Zhong Zi No.662. The court held that the employer had not submitted evidence to prove the rationality of the piecework quota, so it was examined whether the hourly wage of employees was lower than the minimum wage standard according to the conversion of standard workhour system.The reason is probably that Guangdong Province has a regulation in place requesting that at least 70% of staff should be able to complete the piecework quota within normal work hours. 2Article 21 of the Regulations on Payment of Wages in Guangdong Province. ¡°Where piecework wages are implemented, the employer shall scientifically and reasonably determine the piecework quota and piecework unit price and publish them. In principle, the piecework quota determined shall enable more than 70% of the workers in the same role of the employer to complete within the standard work hours.¡±However, there are also decisions ruling that employees are obligated to prove the unreasonableness of their piecework quotas.
A more reasonable approach may be to compare piecework wages under a piecework wage system with industry wage guidance prices. A typical case is Li Jian before Huzhou Intermediate Court of Zhejiang Province in 2015.3In the labor dispute appeal case between Li Jian and Huzhou Tianyang Cable Co., Ltd., Zhejiang Huzhou Intermediate People’s Court Civil Judgment (2015) Zhe Hu Min Zhong Zi No.222. The court compared the median wage standard of the wage guidance price of the same industry with the wages of the employees, and concluded that the piecework quota was reasonable.If the piecework quota and piecework unit price are found to be unreasonable, the court should determine a reasonable piecework unit price or piecework quota according to the industry wage guidance. However, due to the lack of guidance from legislation and judicial interpretation, this approach may go beyond what the courts are willing to intervene. In practice, if courts find that a set of piecework quota and piecework unit price is unreasonable, they normally resort to the minimum wage standard under the standard work hour system to calculate the employees¡¯ wages.
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- 1Xue Chengsong, Wenzhou Shenshi Stationery Co., Ltd. Civil Judgment of the Second Instance of Labor Dispute Civil Judgment of Wenzhou Intermediate People’s Court of Zhejiang Province (2020) No.5193. ¡°The employer implements the piecework wage system for workers, and if the workers claim overtime wages, they shall mainly examine whether the piecework wage piecework quota is reasonable. However, Xue Chengsong did not prove that he and Shenshi Company had agreed on the piecework wage quota or that there was an industry standard that could be referred to.¡±Labor dispute between Shen Xulan and Shenzhen Weimei Children’s Products Co., Ltd., Shenzhen Intermediate People’s Court of Guangdong Province issued a civil judgment (2015) Shen Zhong Fa Lao Zhong Zi No.662. The court held that the employer had not submitted evidence to prove the rationality of the piecework quota, so it was examined whether the hourly wage of employees was lower than the minimum wage standard according to the conversion of standard workhour system.
- 2Article 21 of the Regulations on Payment of Wages in Guangdong Province. ¡°Where piecework wages are implemented, the employer shall scientifically and reasonably determine the piecework quota and piecework unit price and publish them. In principle, the piecework quota determined shall enable more than 70% of the workers in the same role of the employer to complete within the standard work hours.¡±
- 3In the labor dispute appeal case between Li Jian and Huzhou Tianyang Cable Co., Ltd., Zhejiang Huzhou Intermediate People’s Court Civil Judgment (2015) Zhe Hu Min Zhong Zi No.222. The court compared the median wage standard of the wage guidance price of the same industry with the wages of the employees, and concluded that the piecework quota was reasonable.