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Overtime salary in China

Overtime Salary Management practice Section 1: Risk and Burden of proof

 

Overtime salary may be the highest amount claimed by an employee against an employer in labour dispute arbitration. As a matter of fact, in the past in Shenzhen, many factories had to be shut down because of the high amount of overtime salary claims in labour dispute arbitrations.

 

To understand the risk of overtime salary claim, a rough idea is that when an employee states that he has unsettled overtime salary at 100 hours per month; his claim amount of overtime salary will be almost his current monthly salary! Under the current law system, he may claim 24 months overtime salary therefore you can image how much high risk this claim may bring to an employer.

 

After the publication of Supreme Court’s judicial interpretation on several issues of labour dispute cases (3), the proof rules changed to that employee has certain burden of proof. Firstly, where employee proves that employer possesses evidence of overtime (normally it is an attendance sheet), the employer bears the burden of proof. Secondly, being unable to prove the employer’s possession of the evidence, the employee is obliged to preliminarily prove the fact of overtime so that the burden of proof reverses to the employer.

 

Therefore it is vitally important for an employer to improve the management of overtime.

 

1. An employer needs to regulate its labour contracts and staff handbook (or say company rules). Normal referral content to our clients is as follows, “The Company exercises standard working hours, which means 5 days per week and 8 hours per day. Overtime hours shall be approved in advance otherwise they shall be deemed to be invalid.”

 

2. In principle, the employer shall request employees to sign salary slips whose content has been reviewed by a lawyer and that include overtime hours and salary columns. In case that the employer intends to keep salary information confidential, it should request employees to sign on a summarised working hours table per month or per quarter.

           ( 待续To be continued )


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