The novel coronavirus, (now called COVID-19 by the World Health Organization)
The novel coronavirus, (now called COVID-19 by the World Health Organization)
situation in China has caused disruptions in several countries throughout East Asia and South Asia. In some cases, particularly within PRC, government initiatives and health and wellbeing measures taken by companies have shutdown normal operations of companies, with operations halted entirely, or employees instructed to work from home. Work disruptions are now going on the 4th week, including the traditional Lunar New Year holiday period held this year at the end of January. The situation risks causing issues with cash flow as many businesses have now gone three weeks without being able to return to full scale work operations.
For employers with a cash crunch, employee compensation becomes the highest priority. Our China lawyers have received calls from employees and employers alike seeking to clarify employment compensation requirements during the downtime caused by COVID-19 prevention measures. Additionally, for those companies with employees returning to the workplace, there are questions as to what responsibility an employer has for the health of employees in the office or factory.
For employers with a cash crunch, employee compensation becomes the highest priority. Our China lawyers have received calls from employees and employers alike seeking to clarify employment compensation requirements during the downtime caused by COVID-19 prevention measures. Additionally, for those companies with employees returning to the workplace, there are questions as to what responsibility an employer has for the health of employees in the office or factory.
Obligations of Employers
First, employers should understand that under PRC laws, regulations and policies, employers have a legal duty to ensure a generally safe and healthy work environment, and to provide employees with safety materials where appropriate. A company which does not fulfill this duty, risks liability to injured or sick employees, their families, and even potential penalties levied by the government.
specific law addressing prevention of infectious disease, the Law on the Prevention and Treatment of Communicable Diseases (LPTCD). Under this law, an employer has specific legal obligations to take certain measures to prevent and control the spread of infectious diseases. The most important of those obligations are as follows (not an exhaustive list):
Cooperation with disease prevention and control institutions and with medical institutions to implement infection prevention and control measures;
Provide local disease prevention and control institutions and medical institutions with truthful, accurate and timely information regarding infectious disease outbreak;
Timely report infectious diseases and suspected infectious diseases cases to disease prevention and control institutions and medical institutions;
Continue to pay the employee normally during the period of work restriction resulting from the quarantine measures; and Do not discriminate against any employee with a confirmed or suspected infection with communicable disease.
the ("MOHRSS") issued a notice dated 24 January 2020, with instructions to employers as to the correct administration of employment issues during the quarantine and restricted work period.
The most important highlights from these rules include the requirement that any employee who is suspected of having COVID-19 and who receives medical treatment or quarantine requiring absence from work shall receive normal pay during this time and may not be terminated (except in cases of serious disciplinary misconduct).
current COVID-19 outbreak, the Ministry of Human Resources and Social Security
Over the course of the COVID-19 situation, several provinces and municipalities have issues local regulations ordering delayed date for return to normal work operations. MOHRSS and a group of other government departments issued further guidance on February 07, 2020, explaining how companies should handle the resumption of work. This guidance firstly directed employers to communicate with employees to either arrange for work from home, or to have employees take annual leave during the restricted work period, or if the employee is not able to return to work due to travel restrictions. Employers were also directed to be flexible as to working hour schedules where possible.
Working from Home
Work from home arrangements are encouraged by the government with the intent of reducing travel over public transportation and gathering of people within workplaces.
Our China lawyers are seeing the majority of our clients implement company wide Work from Home policies, in fact, even the law firm itself has implemented a Work from Home policy. Employers should keep in mind that employees must be paid full salary during such work from home period.
Even employees which have returned from a locality with high COVID-19 infection rates and who are required to self-quarantine as a result shall be entitled to normal pay and benefits during this time.
Taking leave
PRC annual leave provisions allow an employer to assign employees to take annual leave resulting from overall business conditions, taking into account the employee’s willingness to take annual leave. In the current situation, notices issued by various PRC government bodies direct employers to first consult with employees regarding the potential for the employees to go on mandatory annual leave, or additional exceptional annual leave beyond statutory requirements.
In the current situation, it may be expected for some employers to encourage employees to take annual leave during the ongoing restricted working period, justified by preventative measures against COVID-19.
Travel Restrictions
As part of COVID-19 containment efforts, residents of Wuhan and several other municipalities in Hubei have been effectively quarantined and are prevented from traveling outside of the restricted area. Employers should be generally cognizant of these restrictions and should not require or encourage residents in such restricted cities to attempt to travel to return to work. In fact, some cities in China have issued explicit instructions to employers that they may not encourage return to work of employees who currently reside within cities under COVID-19 quarantine.
The travel restrictions are so broad that China has stopped acceptance, examination and approval of Entry Exit Permit for PRC residents to travel to Hong Kong and Macau.
Recommendations for Employers
Lehman, Lee & Xu recommends employers put in place measures to follow recent notices issued by national and local governments appropriately deal with the COVID-19 outbreak. Specifically employers are recommended to delay the resumption of normal work with appropriate flexible working hour and work from home arrangments. If employees are required to resume work at the office, regular employee temperature checks are encouraged. Special care should be made to ensure office surfaces such as door handles and sink faucets are appropriately disinfected. Face masks and hand disinfectants should be distributed to employees. Employers should also make efforts to record employee travel history and health information and report any red flags to local health authorities. Employees returning from areas with high COVID-19 infection rates should be allowed a self-quarantine period before returning to the office.
Companies are encouraged to take measures to manage employees effectively to avoid mass layoffs. However, in the event that normal operations are unsustainable and the company is forced to suspend business entirely, the company should keep in mind that employee salaries must be paid in full for the first month of suspension. Thereafter, an employer may pay no less than local minimum wage to any employee which has performed work during the pay period, and must pay a “living wage” to those which have not performed work. Employers should recognize that indefinite unpaid leave is not a legal option.