Employers in Guangdong province face new penalties for non-compliance

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On 29 November 2012, Guangdong province promulgated the Regulations on Labour Protection Supervision, which will become effective as of 1 May 2013 and replace the current Guangdong Labour Supervision Regulations of 1996.

bld5Most importantly, the new regulations provide that if an employer does not pay employee wages in full and on time, the labour authorities may publicise the employer’s name, information about the arrear in wages (although not specified in the regulations, this can broadly be read to include overtime wages as well), basic information about the legal representative or person in charge, and publicly order the legal representative or person in charge to co-operate with the authorities. In case of no co-operation after the public notice, the legal representative or person in charge may be fined an amount ranging from RMB10,000 (US$1,600) to RMB50,000. In severe cases, the legal representative or person in charge may be held criminally liable.

The new regulations also clearly provide that the company’s rules and policies may not stipulate any fines against employees, or any wage deductions without legal basis. Under PRC law, wage deductions may only be implemented in a limited number of cases. If the employer fines employees or implements any unlawful wage deduction, the employer must rectify its violation within a period of time specified by the labour authority. Otherwise, the employer will be fined up to RMB5,000 per employee who has been fined, or whose wage has been unlawfully deducted.

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